I
106TH CONGRESS
2D SESSION
H. R. 4941
To amend the Federal Power Act to provide for the reliability of the electric
power transmission system in the United States, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 24, 2000
Mr. WYNN (for himself, Mr. SHADEGG, Mr. PALLONE, Mr. BILBRAY, and Ms.
ESHOO) introduced the following bill; which was referred to the Com-
mittee on Commerce
A BILL
To amend the Federal Power Act to provide for the reliability
of the electric power transmission system in the United
States, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘National Electric Reli-
ability Act’’.
SEC. 2. ELECTRIC ENERGY TRANSMISSION RELIABILITY.
(a) ELECTRIC
RELIABILITY
ORGANIZATION
AND
OVERSIGHT.—
(1) IN GENERAL.—The Federal Power Act is
amended by adding the following new section after
section 214:
‘‘SEC. 215. ELECTRIC RELIABILITY ORGANIZATION AND
OVERSIGHT.
‘‘(a) DEFINITIONS.—As used in this section:
‘‘(1) AFFILIATED REGIONAL RELIABILITY ENTI-
TY.—The term ‘affiliated regional reliability entity’
means an entity delegated authority under the provi-
sions of subsection (h).
‘‘(2) BULK-POWER SYSTEM.—The term ‘bulk-
power system’ means all facilities and control sys-
tems necessary for operating an interconnected
transmission grid (or any portion thereof), including
high-voltage transmission lines; substations; control
centers; communications; data, and operations plan-
ning facilities; and the output of generating units
necessary to maintain transmission system reli-
ability.
‘‘(3) ELECTRIC RELIABILITY ORGANIZATION, OR
ORGANIZATION.—The term ‘Electric Reliability Or-
ganization’ or ‘Organization’ means the organization
approved by the Commission under subsection
(d)(4).
‘‘(4) ENTITY
RULE.—The term ‘entity rule’
means a rule adopted by an affiliated regional reli-
ability entity for a specific region and designed to
implement or enforce one or more Organization
Standards. An entity rule shall be approved by the
organization and once approved, shall be treated as
an Organization Standard.
‘‘(5) INDUSTRY SECTOR.—The term ‘industry
sector’ means a group of users of the bulk power
system with substantially similar commercial inter-
ests, as determined by the Board of the Electric Re-
liability Organization.
‘‘(6) INTERCONNECTION.—The term ‘inter-
connection’ means a geographic area in which the
operation of bulk-power system components is syn-
chronized such that the failure of one or more of
such components may adversely affect the ability of
the operators of other components within the inter-
connection to maintain safe and reliable operation of
the facilities within their control.
‘‘(7) ORGANIZATION
STANDARD.—The term
‘Organization Standard’ means a policy or standard
duly adopted by the Electric Reliability Organization
to provide for the reliable operation of a bulk-power
system.
‘‘(8) PUBLIC
INTEREST
GROUP.—The term
‘public interest group’ means any nonprofit private
or public organization that has an interest in the ac-
tivities of the Electric Reliability Organization, in-
cluding, but not limited to, ratepayer advocates, en-
vironmental groups, and State and local government
organizations that regulate market participants and
promulgate government policy.
‘‘(9) VARIANCE.—The term ‘variance’ means an
exception or variance from the requirements of an
Organization Standard (including a proposal for an
Organization Standard where there is no Organiza-
tion Standard) that is adopted by an affiliated re-
gional reliability entity and applicable to all or a
part of the region for which the affiliated regional
reliability entity is responsible. A variance shall be
approved by the organization and once approved,
shall be treated as an Organization Standard.
‘‘(10) SYSTEM OPERATOR.—The term ‘system
operator’ means any entity that operates or is re-
sponsible for the operation of a bulk-power system,
including but not limited to a control area operator,
an independent system operator, a regional trans-
mission organization, a transmission company, a
transmission system operator, or a regional security
coordinator.
‘‘(11) USER OF THE BULK-POWER SYSTEM.—
The term ‘user of the bulk-power system’ means any
entity that sells, purchases, or transmits electric
power over a bulk-power system, or that owns, oper-
ates, or maintains facilities or control systems that
are part of a bulk-power system, or that is a system
operator.
‘‘(b) COMMISSION
AUTHORITY.—(1) Within the
United States, the Commission shall have jurisdiction over
the Electric Reliability Organization, all affiliated regional
reliability entities, all system operators, and all users of
the bulk-power system, for purposes of approving and en-
forcing compliance with the requirements of this section.
‘‘(2) The Commission may, by rule, define any other
term used in this section, provided such definition is con-
sistent with the definitions in, and the purpose and intent
of, this Act.
‘‘(3) Not later than 90 days after the date of enact-
ment of this section, the Commission shall issue a pro-
posed rule for implementing the requirements of this sec-
tion. The Commission shall provide notice and opportunity
for comment on the proposed rule. The Commission shall
issue a final rule under this subsection within 180 days
after the date of enactment of this section.
‘‘(4) Nothing in this section shall be construed as lim-
iting or impairing any authority of the Commission under
any other provision of this Act, including its exclusive au-
thority to determine rates, terms, and conditions of trans-
mission services subject to its jurisdiction.
‘‘(c) EXISTING
RELIABILITY
STANDARDS.—Fol-
lowing enactment of this section, and prior to the approval
of an organization under subsection (d), any entity, in-
cluding the North American Electric Reliability Council
and its member regional reliability councils, may file any
reliability standard, guidance, or practice that such entity
would propose to be made mandatory and enforceable. The
Commission, after allowing an opportunity to submit com-
ments, may approve any such proposed mandatory stand-
ard, guidance, or practice, or any amendment thereto, if
it finds that the standard, guidance, or practice, or
amendment is just, reasonable, not unduly discriminatory
or preferential, and in the public interest. The Commission
may, without further proceeding or finding, grant its ap-
proval to any standard, guidance, or practice for which
no substantive objections are filed in the comment period.
Filed standards, guidances, or practices, including any
amendments thereto, shall be mandatory and applicable
according to their terms following approval by the Com-
mission and shall remain in effect until (1) withdrawn,
disapproved, or superseded by an Organization Standard,
issued or approved by the Electric Reliability Organization
and made effective by the Commission under subsection
(e); or (2) disapproved by the Commission if, upon com-
plaint or upon its own motion and after notice and an
opportunity for comment, the Commission finds the stand-
ard, guidance, or practice unjust, unreasonable, unduly
discriminatory, or preferential or not in the public inter-
est. Standards, guidances, or practices in effect pursuant
to the provisions of this subsection shall be enforceable
by the Commission.
‘‘(d) ORGANIZATION APPROVAL.—(1) Following the
issuance of a final Commission rule under subsection
(b)(3), an entity may submit an application to the Com-
mission for approval as the Electric Reliability Organiza-
tion. The applicant shall specify in its application its gov-
ernance and procedures, as well as its funding mechanism
and initial funding requirements.
‘‘(2) The Commission shall provide public notice of
the application and afford interested parties an oppor-
tunity to comment.
‘‘(3) The Commission shall approve the application
if the Commission determines that the applicant—
‘‘(A) has the ability to develop, implement, and
enforce standards that provide for an adequate level
of reliability of the bulk-power system;
‘‘(B) permits voluntary membership to any user
of the bulk-power system or public interest group;
‘‘(C) assures fair representation of its members
in the selection of its directors and fair management
of its affairs, taking into account the need for effi-
ciency and effectiveness in decisionmaking and oper-
ations and the requirements for technical com-
petency in the development of Organization Stand-
ards and the exercise of oversight of bulk-power sys-
tem reliability;
‘‘(D) assures that no two industry sectors have
the ability to control, and no one industry sector has
the ability to veto, the Electric Reliability Organiza-
tion’s discharge of its responsibilities (including ac-
tions by committees recommending standards to the
board or other board actions to implement and en-
force standards);
‘‘(E) provides for governance by a board wholly
comprised of independent directors;
‘‘(F) provides a funding mechanism and re-
quirements that are just, reasonable, and not unduly
discriminatory or preferential and are in the public
interest, and which satisfy the requirements of sub-
section (l);
‘‘(G) establishes procedures for development of
Organization Standards that provide reasonable no-
tice and opportunity for public comment, taking into
account the need for efficiency and effectiveness in
decisionmaking and operations and the requirements
for technical competency in the development of Or-
ganization Standards, and which standards develop-
ment process has the following attributes:
‘‘(i) openness,
‘‘(ii) balance of interests, and
‘‘(iii) due process, except that the proce-
dures may include alternative procedures for
emergencies;
‘‘(H) establishes fair and impartial procedures
for implementation and enforcement of Organization
Standards, either directly or through delegation to
an affiliated regional reliability entity, including the
imposition of penalties, limitations on activities,
functions, or operations, or other appropriate sanc-
tions;
‘‘(I) establishes procedures for notice and op-
portunity for public observation of all meetings, ex-
cept that the procedures for public observation may
include alternative procedures for emergencies or for
the discussion of information the directors determine
should take place in closed session, such as litiga-
tion, personnel actions, or commercially sensitive in-
formation;
‘‘(J) provides for the consideration of rec-
ommendations of States and State commissions; and
‘‘(K) addresses other matters that the Commis-
sion may deem necessary or appropriate to ensure
that the procedures, governance, and funding of the
Electric Reliability Organization are just, reason-
able, not unduly discriminatory or preferential, and
are in the public interest.
‘‘(4) The Commission shall approve only one Electric
Reliability Organization. If the Commission receives two
or more timely applications that satisfy the requirements
of this subsection, the Commission shall approve only the
application it concludes will best implement the provisions
of this section.
‘‘(e) ESTABLISHMENT OF AND MODIFICATIONS TO
ORGANIZATION STANDARDS.—(1) The Electric Reliability
Organization shall file with the Commission any new or
modified organization standards, including any variances
or entity rules, and the Commission shall follow the proce-
dures under paragraph (2) for review of that filing.
‘‘(2) 
Submissions 
under 
paragraph 
(1) 
shall
include—
‘‘(A) a concise statement of the purpose of the
proposal, and
‘‘(B) a record of any proceedings conducted
with respect to such proposal.
The Commission shall provide notice of the filing of such
proposal and afford interested entities 30 days to submit
comments. The Commission, after taking into consider-
ation any submitted comments, shall approve or dis-
approve such proposal not later than 60 days after the
deadline for the submission of comments, except that the
Commission may extend the 60-day period for an addi-
tional 90 days for good cause, and except further that if
the Commission does not act to approve or disapprove a
proposal within the foregoing periods, the proposal shall
go into effect subject to its terms, without prejudice to
the authority of the Commission thereafter to modify the
proposal in accordance with the standards and require-
ments of this section. Proposals approved by the Commis-
sion shall take effect according to their terms but not ear-
lier than 30 days after the effective date of the Commis-
sion’s order, except as provided in paragraph (3) of this
subsection.
‘‘(3)(A) In the exercise of its review responsibilities
under this subsection, the Commission shall give due
weight to the technical expertise of the Electric Reliability
Organization with respect to the content of a new or modi-
fied organization standard, but shall not defer to the orga-
nization with respect to the effect of the standard on com-
petition. The Commission shall approve a proposed new
or modified organization standard if it determines the pro-
posal to be just, reasonable, not unduly discriminatory or
preferential, and in the public interest.
‘‘(B) An existing or proposed organization standard
which is disapproved in whole or in part by the Commis-
sion shall be remanded to the Electric Reliability Organi-
zation for further consideration.
‘‘(C) The Commission, on its own motion or upon
complaint, may direct the Electric Reliability Organization
to develop an organization standard, including modifica-
tion to an existing organization standard, addressing a
specific matter by a date certain if the Commission con-
siders such new or modified organization standard nec-
essary or appropriate to further the purposes of this sec-
tion. The Electric Reliability Organization shall file any
such new or modified organization standard in accordance
with this subsection.
‘‘(D) An affiliated regional reliability entity may pro-
pose a variance or entity rule to the Electric Reliability
Organization. The affiliated regional reliability entity may
request that the Electric Reliability Organization expedite
consideration of the proposal, and may file a notice of such
request with the Commission, if expedited consideration
is necessary to provide for bulk-power system reliability.
If the Electric Reliability Organization fails to adopt the
variance or entity rule, either in whole or in part, the affili-
ated regional reliability entity may request that the Com-
mission review such action. If the Commission determines,
after its review of such a request, that the action of the
Electric Reliability Organization did not conform to the
applicable standards and procedures approved by the
Commission, or if the Commission determines that the
variance or entity rule is just, reasonable, not unduly dis-
criminatory or preferential, and in the public interest, and
that the Electric Reliability Organization has unreason-
ably rejected the proposed variance or entity rule, then
the Commission may remand the proposed variance or en-
tity rule for further consideration by the Electric Reli-
ability Organization or may direct the Electric Reliability
Organization or the affiliated regional reliability entity to
develop a variance or entity rule consistent with that re-
quested by the affiliated regional reliability entity. Any
such variance or entity rule proposed by an affiliated re-
gional reliability entity shall be submitted to the Electric
Reliability Organization for review and filing with the
Commission in accordance with the procedures specified
in this subsection.
‘‘(E) Notwithstanding any other provision of this sub-
section, a proposed organization standard or amendment
shall take effect according to its terms if the Electric Reli-
ability Organization determines that an emergency exists
requiring that such proposed organization standard or
amendment take effect without notice or comment. The
Electric Reliability Organization shall notify the Commis-
sion immediately following such determination and shall
file such emergency organization standard or amendment
with the Commission not later than 5 days following such
determination and shall include in such filing an expla-
nation of the need for such emergency standard. Subse-
quently, the Commission shall provide notice of the organi-
zation standard or amendment for comment, and shall fol-
low the procedures set out in paragraphs (2) and (3) for
review of the new or modified organization standard. Any
such organization standard that has gone into effect shall
remain in effect unless and until suspended or disapproved
by the Commission. If the Commission determines at any
time that the emergency organization standard or amend-
ment is not necessary, the Commission may suspend such
emergency organization standard or amendment.
‘‘(4) All users of the bulk-power system shall comply
with any organization standard that takes effect under
this section.
‘‘(f) COORDINATION WITH CANADA AND MEXICO.—
The Electric Reliability Organization shall take all appro-
priate steps to gain recognition in Canada and Mexico.
The United States shall use its best efforts to enter into
international agreements with the appropriate govern-
ments of Canada and Mexico to provide for effective com-
pliance with organization standards and to provide for the
effectiveness of the Electric Reliability Organization in
carrying out its mission and responsibilities. All actions
taken by the Electric Reliability Organization, any affili-
ated regional reliability entity, and the Commission shall
be consistent with the provisions of such international
agreements.
‘‘(g) CHANGES IN PROCEDURES, GOVERNANCE, OR
FUNDING.—(1) The Electric Reliability Organization shall
file with the Commission any proposed change in its proce-
dures, governance, or funding, or any changes in the affili-
ated regional reliability entity’s procedures, governance, or
funding relating to delegated functions, and shall include
with the filing an explanation of the basis and purpose
for the change.
‘‘(2) A proposed procedural change may take effect
90 days after filing with the Commission if the change
constitutes a statement of policy, practice, or interpreta-
tion with respect to the meaning or enforcement of an ex-
isting procedure. Otherwise, a proposed procedural change
shall take effect only upon a finding by the Commission,
after notice and opportunity for comments, that the
change is just, reasonable, not unduly discriminatory or
preferential, is in the public interest, and satisfies the re-
quirements of subsection (d)(4).
‘‘(3) A change in governance or funding shall not
take effect unless the Commission finds that the change
is just, reasonable, not unduly discriminatory or pref-
erential, in the public interest, and satisfies the require-
ments of subsection (d)(4).
‘‘(4) The Commission, upon complaint or upon its
own motion, may require the Electric Reliability Organiza-
tion to amend the procedures, governance, or funding if
the Commission determines that the amendment is nec-
essary to meet the requirements of this section. The Elec-
tric Reliability Organization shall file the amendment in
accordance with paragraph (1) of this subsection.
‘‘(h) DELEGATIONS OF AUTHORITY.—(1) The Elec-
tric Reliability Organization shall, upon request by an en-
tity, enter into an agreement with such entity for the dele-
gation of authority to implement and enforce compliance
with organization standards in a specified geographic area
if the organization finds that the entity requesting the del-
egation satisfies the requirements of subparagraphs (A),
(B), (C), (D), (F), (J), and (K) of subsection (d)(4), and
if the delegation promotes the effective and efficient imple-
mentation and administration of bulk-power system reli-
ability. The Electric Reliability Organization may enter
into an agreement to delegate to the entity any other au-
thority, except that the Electric Reliability Organization
shall reserve the right to set and approve standards for
bulk-power system reliability.
‘‘(2) The Electric Reliability Organization shall file
with the Commission any agreement entered into under
this subsection and any information the Commission re-
quires with respect to the affiliated regional reliability en-
tity to which authority is to be delegated. The Commission
shall approve the agreement, following public notice and
an opportunity for comment, if it finds that the agreement
meets the requirements of paragraph (1), and is just, rea-
sonable, not unduly discriminatory or preferential, and is
in the public interest. A proposed delegation agreement
with an affiliated regional reliability entity organized on
an interconnection-wide basis shall be rebuttably pre-
sumed by the Commission to promote the effective and
efficient implementation and administration of bulk-power
system reliability. No delegation by the Electric Reliability
Organization shall be valid unless approved by the Com-
mission.
‘‘(3)(A) A delegation agreement entered into under
this subsection shall specify the procedures for an affili-
ated regional reliability entity to propose entity rules or
variances for review by the Electric Reliability Organiza-
tion. With respect to any such proposal that would apply
on an interconnection-wide basis, the Electric Reliability
Organization shall presume such proposal valid if made
by an interconnection-wide affiliated regional reliability
entity unless the Electric Reliability Organization makes
a written finding that the proposal—
‘‘(i) was not developed in a fair and open proc-
ess that provided an opportunity for all interested
parties to participate;
‘‘(ii) has a significant adverse impact on reli-
ability or commerce in other interconnections;
‘‘(iii) fails to provide a level of reliability of the
bulk-power system within the interconnection such
that it would constitute a serious and substantial
threat to public health, safety, welfare, or national
security; or
‘‘(iv) creates a serious and substantial burden
on competitive markets within the interconnection
that is not necessary for reliability.
‘‘(B) With respect to any such proposal that would
apply only to part of an interconnection, the Electric Reli-
ability Organization shall find such proposal valid if the
affiliated regional reliability entity or entities making the
proposal demonstrate that it—
‘‘(i) was developed in a fair and open process
that provided an opportunity for all interested par-
ties to participate;
‘‘(ii) would not have an adverse impact on com-
merce that is not necessary for reliability;
‘‘(iii) provides a level of bulk-power system reli-
ability adequate to protect public health, safety, wel-
fare, and national security, and would not have a
significant adverse impact on reliability; and
‘‘(iv) in the case of a variance, is based on le-
gitimate differences between regions or between sub-
regions within the affiliated regional reliability enti-
ty’s geographic area.
The Electric Reliability Organization shall approve or dis-
approve such proposal within 120 days, or the proposal
shall be deemed approved. Following approval of any such
proposal under this paragraph, the Electric Reliability Or-
ganization shall seek Commission approval pursuant to
the procedures prescribed under subsection (e)(3). Affili-
ated regional reliability entities may not make requests for
approval directly to the Commission except pursuant to
subsection (e)(3)(D).
‘‘(4) If an affiliated regional reliability entity re-
quests, consistent with paragraph (1) of this subsection,
that the Electric Reliability Organization delegate author-
ity to it, but is unable within 180 days to reach agreement
with the Electric Reliability Organization with respect to
such requested delegation, such entity may seek relief
from the Commission. If, following notice and opportunity
for comment, the Commission determines that a delega-
tion to the entity would meet the requirements of para-
graph (1) above, and that the delegation would be just,
reasonable, not unduly discriminatory or preferential, and
in the public interest, and that the Electric Reliability Or-
ganization has unreasonably withheld such delegation, the
Commission may, by order, direct the Electric Reliability
Organization to make such delegation.
‘‘(5)(A) The Commission may, upon its own motion
or upon complaint, and with notice to the appropriate af-
filiated regional reliability entity or entities, direct the
Electric Reliability Organization to propose a modification
to an agreement entered into under this subsection if the
Commission determines that—
‘‘(i) the affiliated regional reliability entity no
longer has the capacity to carry out effectively or ef-
ficiently its implementation or enforcement respon-
sibilities under that agreement, has failed to meet its
obligations under that agreement, or has violated
any provision of this section;
‘‘(ii) the rules, practices, or procedures of the
affiliated regional reliability entity no longer provide
for fair and impartial discharge of its implementa-
tion or enforcement responsibilities under the agree-
ment;
‘‘(iii) the geographic boundary of a transmission
entity approved by the Commission is not wholly
within the boundary of an affiliated regional reli-
ability entity and such difference is inconsistent with
the effective and efficient implementation and ad-
ministration of bulk-power system reliability; or
‘‘(iv) the agreement is inconsistent with another
delegation agreement as a result of actions taken
under paragraph (4) of this subsection.
‘‘(B) Following an order of the Commission issued
under subparagraph (A), the Commission may suspend
the affected agreement if the Electric Reliability Organiza-
tion or the affiliated regional reliability entity does not
propose an appropriate and timely modification. If the
agreement is suspended, the Electric Reliability Organiza-
tion shall assume the previously delegated responsibilities.
The Commission shall allow the Electric Reliability Orga-
nization and the affiliated regional reliability entity an op-
portunity to appeal the suspension.
‘‘(i) ORGANIZATION MEMBERSHIP.—Every system
operator shall be required to be a member of the Electric
Reliability Organization and shall be required also to be
a member of any affiliated regional reliability entity oper-
ating under an agreement effective pursuant to subsection
(h) applicable to the region in which the system operator
operates or is responsible for the operation of bulk-power
system facilities.
‘‘(j) INJUNCTIONS AND DISCIPLINARY ACTION.—(1)
Consistent with the range of actions approved by the Com-
mission under subsection (d)(4)(H), the Electric Reli-
ability Organization may impose a penalty, limitation of
activities, functions, operations, or other disciplinary ac-
tion the Electric Reliability Organization finds appropriate
against a user of the bulk-power system if the Electric
Reliability Organization, after notice and an opportunity
for interested parties to be heard, issues a finding in writ-
ing that the user of the bulk-power system has violated
an organization standard. The Electric Reliability Organi-
zation shall immediately notify the Commission of any dis-
ciplinary action imposed with respect to an act or failure
to act of a user of the bulk-power system that affected
or threatened to affect bulk-power system facilities located
in the United States, and the sanctioned party shall have
the right to seek modification or rescission of such discipli-
nary action by the Commission. If the organization finds
it necessary to prevent a serious threat to reliability, the
organization may seek injunctive relief in a Federal court
in the district in which the affected facilities are located.
‘‘(2) A disciplinary action taken under paragraph (1)
may take effect not earlier than the 30th day after the
Electric Reliability Organization files with the Commission
its written finding and record of proceedings before the
Electric Reliability Organization and the Commission
posts its written finding, unless the Commission, on its
own motion or upon application by the user of the bulk-
power system which is the subject of the action, suspends
the action. The action shall remain in effect or remain
suspended unless and until the Commission, after notice
and opportunity for hearing, affirms, sets aside, modifies,
or reinstates the action, but the Commission shall conduct
such hearing under procedures established to ensure expe-
dited consideration of the action taken.
‘‘(3) The Commission, on its own motion or on com-
plaint, may order compliance with an organization stand-
ard and may impose a penalty, limitation of activities,
functions, or operations, or take such other disciplinary
action as the Commission finds appropriate, against a user
of the bulk-power system with respect to actions affecting
or threatening to affect bulk-power system facilities lo-
cated in the United States if the Commission finds, after
notice and opportunity for a hearing, that the user of the
bulk-power system has violated or threatens to violate an
organization standard.
‘‘(4) The Commission may take such action as is nec-
essary against the Electric Reliability Organization or an
affiliated regional reliability entity to assure compliance
with an organization standard, or any Commission order
affecting the Electric Reliability Organization or an affili-
ated regional reliability entity.
‘‘(k) RELIABILITY REPORTS.—The Electric Reli-
ability Organization shall conduct periodic assessments of
the reliability and adequacy of the interconnected bulk-
power system in North America and shall report annually
to the Secretary of Energy and the Commission its find-
ings and recommendations for monitoring or improving
system reliability and adequacy.
‘‘(l) ASSESSMENT
AND
RECOVERY
OF
CERTAIN
COSTS.—The reasonable costs of the Electric Reliability
Organization, and the reasonable costs of each affiliated
regional reliability entity that are related to implementa-
tion and enforcement of organization standards or other
requirements contained in a delegation agreement ap-
proved under subsection (h), shall be assessed by the Elec-
tric Reliability Organization and each affiliated regional
reliability entity, respectively, taking into account the rela-
tionship of costs to each region and based on an allocation
that reflects an equitable sharing of the costs among all
end users. The Commission shall provide by rule for the
review of such costs and allocations, pursuant to the
standards in this subsection and subsection (d)(4)(F).
‘‘(m) SAVINGS PROVISIONS.—(1) The Electric Reli-
ability Organization shall have authority to develop, imple-
ment and enforce compliance with standards for the reli-
able operation of only the Bulk Power System.
‘‘(2) This section does not provide the Electric Reli-
ability Organization or the Commission with the authority
to set and enforce compliance 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-
sistent with any Organization Standard.
‘‘(4) Within 90 days of the application of the Electric
Reliability Organization or other affected party, the Com-
mission shall issue a final order determining whether a
state action is inconsistent with an Organization Stand-
ard, after notice and opportunity for comment, taking into
consideration any recommendations of the Electric Reli-
ability Organization.
‘‘(5) The Commission, after consultation with the
Electric Reliability Organization, may stay the effective-
ness of any state action, pending the Commission’s
issuance of a final order.
‘‘(n) REGIONAL ADVISORY BODIES.—The Commis-
sion shall establish a regional advisory body on the petition
of at least two-thirds of the States within a region that
have more than one-half of their electric loan served within
the region. A regional advisory body shall be composed of
one member from each participating State in the region,
appointed by the Governor of each State, and may include
representatives of agencies, States, and provinces outside
the United States, upon execution of an international
agreement or agreements described in subsection (f). A
regional advisory body may provide advice to the electric
reliability organization, an affiliated regional reliability en-
tity, or the Commission regarding the governance of an
existing or proposed affiliated regional reliability entity
within the same region, whether an organization standard,
entity rule, or variance proposed to apply within the region
is just, reasonable, not unduly discriminatory or pref-
erential, and in the public interest, and whether fees pro-
posed to be assessed within the region are just, reasonable,
not unduly discriminatory or preferential, in the public in-
terest, and consistent with the requirements of subsection
(l). The Commission may give deference to the advice of
any such regional advisory body if that body is organized
on an interconnection-wide basis.
‘‘(o) COORDINATION WITH REGIONAL TRANSMISSION
ORGANIZATIONS.—(1) Each regional transmission organi-
zation authorized by the Commission shall be responsible
for maintaining the short-term reliability of the bulk-
power system that it operates, consistent with organiza-
tion standards.
‘‘(2) Except as provided in paragraph (5), in connec-
tion with a proceeding under subsection (e) to consider
a proposed organization standard, each regional trans-
mission organization authorized by the Commission shall
report to the Commission, and notify the electric reliability
organization and any applicable affiliated regional reli-
ability entity, regarding whether the proposed organiza-
tion standard hinders or conflicts with that regional trans-
mission organization’s ability to fulfill the requirements of
any Commission-accepted, approved, or ordered rule, regu-
lation, order, tariff, rate schedule, or agreement. Where
such hindrance or conflict is identified, the Commission
shall address such hindrance or conflict, and the need for
any changes to such Commission-accepted, approved, or
ordered rule, order, tariff, rate schedule, or agreement in
its order under subsection (e) regarding the proposed
standard. Where such hindrance or conflict is identified
between a proposed organization standard and a provision
of any rule, order, tariff, rate schedule or agreement ac-
cepted, approved or ordered by the Commission applicable
to a regional transmission organization, nothing in this
section shall require a change in the regional transmission
organization’s obligation to comply with such provision un-
less the Commission orders such a change and the change
becomes effective. If the Commission finds that the tariff,
rate schedule, or agreement needs to be changed, the re-
gional transmission organization must expeditiously make
a section 205 filing to reflect the change. If the Commis-
sion finds that the proposed organization standard needs
to be changed, it shall remand the proposed organization
standard to the electric reliability organization under sub-
section (e)(3)(B).
‘‘(3) Except as provided in paragraph (5), to the ex-
tent hindrances and conflicts arise after approval of a reli-
ability standard under subsection (c) or organization
standard under subsection (e), each regional transmission
organization authorized by the Commission shall report to
the Commission, and notify the electric reliability organi-
zation and any applicable affiliated regional reliability en-
tity, regarding any reliability standard approved under
subsection (c) or organization standard that hinders or
conflicts with that regional transmission organization’s
ability to fulfill the requirements of any Commission-ac-
cepted, approved, or ordered rule, regulation, order, tariff,
rate schedule, or agreement. The Commission shall seek
to assure that such hindrances or conflicts are resolved
promptly. Where a hindrance or conflict is identified be-
tween a reliability standard or an organization standard
and a provision of any rule, order, tariff, rate schedule
or agreement accepted, approved or ordered by the Com-
mission applicable to a regional reliability organization,
nothing in this section shall require a change in the re-
gional transmission organization’s obligation to comply
with such provision unless the Commission orders such a
change and the change becomes effective. If the Commis-
sion finds that the tariff, rate schedule or agreement needs
to be changed, the regional transmission organization
must expeditiously make a section 205 filing to reflect the
change. If the Commission finds that an organization
standard needs to be changed, it shall order the electric
reliability organization to develop and submit a modified
organization standard under subsection (e)(3)(C).
‘‘(4) An affiliated regional reliability entity and a re-
gional transmission organization operating in the same ge-
ographic area shall cooperate to avoid conflicts between
implementation and enforcement of organization stand-
ards by the affiliated regional reliability entity and imple-
mentation and enforcement of Commission-accepted tar-
iffs, rate schedules, and agreements by the regional trans-
mission organization. In areas without an affiliated re-
gional reliability entity, the electric reliability organization
shall act as the affiliated regional reliability entity for pur-
poses of this paragraph.
‘‘(5) Until 6 months after approval of applicable sub-
section (h)(3) procedures, any reliability standard, guid-
ance, or practice contained in Commission-accepted tar-
iffs, rate schedules, or agreements in effect of any Com-
mission-authorized independent system operator or re-
gional transmission organization shall continue to apply
unless the Commission accepts an amendment thereto by
the applicable operator or organization, or upon complaint
finds them to be unjust, unreasonable, unduly discrimina-
tory or preferential, or not in the public interest. At the
conclusion of such transition period, any such reliability
standard, guidance, practice, or amendment thereto that
the Commission determines is inconsistent with organiza-
tion standards shall no longer apply.’’.
(2) ENFORCEMENT.—Sections 316 and 316A of
the Federal Power Act are each amended by striking
‘‘or 214’’ each place it appears and inserting ‘‘214,
or 215’’.
(b) APPLICATION OF ANTITRUST LAWS.—Notwith-
standing any other provision of law, each of the following
activities are rebuttably presumed to be in compliance with
the antitrust laws of the United States:
(1) Activities undertaken by the Electric Reli-
ability Organization under section 215 of the Fed-
eral Power Act or affiliated regional reliability entity
operating under an agreement in effect under sec-
tion 215(h) of such Act.
(2) Activities of a member of the Electric Reli-
ability Organization or affiliated regional reliability
entity in pursuit of organization objectives under
section 215 of the Federal Power Act undertaken in
good faith under the rules of the organization.
Primary jurisdiction, and immunities and other affirma-
tive defenses, shall be available to the extent otherwise ap-
plicable.
Æ