I
105TH CONGRESS
2D SESSION
H. R. 4715
To remove Federal impediments to retail competition in the electric power
industry, thereby providing opportunities within electricity restructuring.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 7, 1998
Mr. BURR of North Carolina introduced the following bill; which was referred
to the Committee on Commerce
A BILL
To remove Federal impediments to retail competition in the
electric power industry, thereby providing opportunities
within electricity restructuring.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as ‘‘The
Power Bill’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Competitive retail electricity markets.
Sec. 4. PURPA.
Sec. 5. Public Utility Holding Company Act of 1935.
Sec. 6. Stranded cost.
Sec. 7. Disposition of property.
Sec. 8. Savings clause.
Sec. 9. Study.
SEC. 2. FINDINGS.
The Congress finds that:
(1) Many States have moved to retail competi-
tion.
(2) There are Federal barriers to full retail
competition.
(3) The executive branch projects that retail
competition 
will 
save 
the 
American 
taxpayer
$20,000,000,000.
(4) If Congress acts to remove Federal impedi-
ments to retail competition, States will have greater
incentive to move to competition and should be en-
couraged to proceed expeditiously and with due care
to rely more on markets and less on regulation to
increase the quality and discipline the price of elec-
tric service.
SEC. 3. COMPETITIVE RETAIL ELECTRICITY MARKETS.
(a) CLARIFICATION
OF
STATE
AUTHORITY
TO
ORDER RETAIL WHEELING.—Subsection (h) of section
212 of the Federal Power Act (16 U.S.C. 824k(h)) is
amended by striking the last sentence and inserting the
following: ‘‘Nothing in this subsection shall affect any au-
thority of any State or local government under State law
concerning the transmission or sale of electric energy di-
rectly to an ultimate consumer.’’.
(b) CLARIFICATION OF STATE AUTHORITY TO IM-
POSE
CONDITIONS
REGARDING
SALES
OF
ELEC-
TRICITY.—Section 201 of the Federal Power Act is
amended by adding the following new subsections at the
end thereof:
‘‘(h) RECIPROCITY CONDITION.—
‘‘(1) A State may permit an electric utility sub-
ject to its jurisdiction to deny access to its trans-
mission and local distribution facilities within the
State’s borders to any seller of electric energy for
the sale of electric energy directly to an ultimate
consumer within the State’s borders if, as deter-
mined by certification to the Commission in a form
the Commission shall prescribe within 180 days of
the enactment of this paragraph, the predominance
of the electric energy sold by that seller directly to
ultimate consumers is produced in a State or States
that maintain exclusive franchise or market areas
for the sale of electric energy directly to ultimate
consumers.
‘‘(2) NONREGULATED UTILITIES.—If, as of the
date of the enactment of this paragraph, a State has
not established ratemaking authority with respect to
an electric utility in the State, the State may not
prohibit the utility from selling electric energy at re-
tail in interstate commerce in any other State. Any
such utility may sell electric energy at retail in inter-
state commerce in another State only if the utility
provides nondiscriminatory open access (including
the functional unbundling of services) to the local
distribution facilities of the utility and to any trans-
mission facilities of the utility that are not subject
to the jurisdiction of the Federal Energy Regulatory
Commission under sections 205 and 206 of this Act.
‘‘(i) COOPERATIVE CHOICE.—Notwithstanding any
other provision of law, cooperatively owned sellers or dis-
tributors of electricity shall have the right, as consumer-
owned cooperatives, to engage in any activity or provide
any service that is lawfully carried out by any other seller
or distributor of electricity in that State.
‘‘(j) BYPASS.—(1) Notwithstanding any provision of
this Act or any other law, a State or a State regulatory
authority (in carrying out its authority to regulate facili-
ties used for the local distribution of electric energy or
for the provision of local distribution service) may require,
as a condition for the purchase by any person or munici-
pality of retail electric energy services, the payment of a
charge deemed necessary by the State or State regulatory
authority for any of the following:
‘‘(A) To recover costs incurred by an electric
utility that become unrecoverable due to the avail-
ability of retail electric service choice.
‘‘(B) To ensure that adequate electric service is
available to all customers served by the retail dis-
tribution system concerned.
‘‘(C) To ensure and enhance the reliability of
retail electric service.
‘‘(D) To fund assistance to low-income cus-
tomers.
‘‘(E) To encourage environmental, renewable
energy, energy efficiency, conservation programs, or
any combination of such programs.
‘‘(F) To provide for retraining of electric em-
ployees.
‘‘(G) To provide payment of all reasonable costs
associated with Federal and State requirements re-
garding the decommissioning of nuclear generating
units.
‘‘(H) Any combination of the purposes de-
scribed in subparagraphs (A) through (G).
‘‘(2) For purposes of this subsection, the term ‘local
distribution service’ includes the receipt of electric energy
by an end user whether or not such receipt requires the
use of local distribution facilities.’’.
SEC. 4. PURPA.
(a) FINDINGS.—The Congress finds that—
(1) implementation of section 210 of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C.
824a–3) resulted in many consumers paying exces-
sive rates for electricity;
(2) the Energy Policy Act of 1992 gives non-
regulated producers of electricity additional access to
the wholesale electric market through transmission
access and exemption from the Public Utility Hold-
ing Company Act of 1935; and
(3) in light of the competitive wholesale electric
marketplace brought about by the Energy Policy Act
of 1992, section 210 of the Public Utility Regulatory
Policies Act of 1978 need no longer exist.
(b) PROSPECTIVE REPEAL.—
(1) NEW CONTRACTS.—After January 1, 1999,
no electric utility shall be required to enter into a
new contract or obligation to purchase or to sell
electric energy or capacity pursuant to section 210
of the Public Utility Regulatory Policies Act of
1978.
(2) EXISTING RIGHTS AND REMEDIES NOT AF-
FECTED.—Nothing in this section affects the rights
or remedies of any party with respect to the pur-
chase or sale of electric energy or capacity from or
to a facility determined to be a qualifying small
power production facility or a qualifying cogenera-
tion facility under section 210 of the Public Utility
Regulatory Policies Act of 1978 pursuant to any
contract or obligation to purchase or to sell electric
energy or capacity in effect on January 1, 1999, in-
cluding the right to recover the costs of purchasing
such electric energy or capacity.
(3) INTERPRETATIONS AND ACTIONS TAKEN.—
Nothing in this Act may be deemed or construed as
implying congressional ratification of any interpreta-
tion of, or any action taken pursuant to, the Public
Utility Regulatory Policies Act of 1978.
(c) RECOVERY OF COSTS.—In order to assure recov-
ery by electric utilities purchasing electric energy or capac-
ity from a qualifying facility pursuant to any legally en-
forceable obligation entered into or imposed pursuant to
section 210 of the Public Utility Regulatory Policies Act
of 1978 prior to January 1, 1999, of all costs associated
with such purchases, the Commission shall promulgate
and enforce such regulations as may be required to assure
that no utility shall be required directly or indirectly to
absorb the costs associated with such purchases from a
qualifying facility. Such regulations shall be treated as a
rule enforceable under the Federal Power Act (16 U.S.C.
791a–825r).
(d) DEFINITIONS.—For purposes of this section:
(1) The term ‘‘Commission’’ means the Federal
Energy Regulatory Commission.
(2) The term ‘‘electric utility’’ means any per-
son, State agency, or Federal agency, which sells
electric energy.
(3) The term ‘‘qualifying small power produc-
tion facility’’ has the same meaning as provided in
section 3(17)(C) of the Federal Power Act.
(4) The term ‘‘qualifying cogeneration facility’’
has the same meaning as provided in section
3(18)(A) of the Federal Power Act.
(5) The term ‘‘qualifying facility’’ means either
a small power production facility or a qualifying co-
generation facility.
SEC. 5. PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.
(a) FINDINGS.—The Congress finds that—
(1) the Public Utility Holding Company Act of
1935 was intended to facilitate the work of Federal
and State regulators by placing certain constraints
on the activities of holding company systems;
(2) developments since 1935, including changes
in other regulation and in the electric and gas indus-
tries, have called into question the continued rel-
evance of the model of regulation established by that
Act;
(3) there is a continuing need for limited Fed-
eral and State regulation in order to ensure the rate
protection of utility customers; and
(4) limited Federal regulation is necessary to
supplement the work of State commissions for the
continued rate protection of electric and gas utility
customers.
(b) PURPOSES.—The purposes of this section are—
(1) to eliminate unnecessary regulation, yet
continue to provide for consumer protection by facili-
tating existing rate regulatory authority through im-
proved Federal and State commission access to
books and records of all companies in a holding com-
pany system, to the extent that such information is
relevant to rates paid by utility customers, while af-
fording companies the flexibility required to compete
in the energy markets; and
(2) to address protection of electric and gas
utility customers by providing for Federal and State
access to books and records of all companies in a
holding company system that are relevant to utility
rates.
(c) DEFINITIONS.—For purposes of this section:
(1) The term ‘‘affiliate’’ of a company means
any company 5 percent or more of the outstanding
voting securities of which are owned, controlled, or
held with power to vote, directly or indirectly, by
such company.
(2) The term ‘‘associate company’’ of a com-
pany means any company in the same holding com-
pany system with such company.
(3) The term ‘‘Commission’’ means the Federal
Energy Regulatory Commission.
(4) The term ‘‘company’’ means a corporation,
partnership, association, joint stock company, busi-
ness trust, or any organized group of persons,
whether incorporated or not, or a receiver, trustee,
or other liquidating agent of any of the foregoing.
(5) 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) The terms ‘‘exempt wholesale generator’’
and ‘‘foreign utility company’’ have the same mean-
ings as in sections 32 and 33, respectively, of the
Public Utility Holding Company Act of 1935, as
those sections existed on the day before the effective
date of this Act.
(7) 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) 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 one or more persons) such a con-
(13) The term ‘‘public utility’’ means any per-
son who owns or operates facilities used for trans-
mission of electric energy in interstate commerce or
sales of electric energy at wholesale in interstate
commerce.
(14) The term ‘‘public utility company’’ means
an electric utility company or a gas utility company.
(15) 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 util-
ity companies.
(16) The term ‘‘subsidiary company’’ of a hold-
ing 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-
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 Act upon subsidiary com-
panies of holding companies.
(17) The term ‘‘voting security’’ means any se-
curity presently entitling the owner or holder thereof
to vote in the direction or management of the affairs
of a company.
(d) REPEAL
OF
THE PUBLIC UTILITY HOLDING
COMPANY ACT
OF 1935.—The Public Utility Holding
Company Act of 1935 (15 U.S.C. 79a et seq.) is repealed,
effective 18 months after the date of enactment of this
Act.
(e) FEDERAL ACCESS TO BOOKS AND RECORDS.—
(1) IN GENERAL.—Each holding company and
each associate company thereof shall maintain, and
shall make available to the Commission, such books,
accounts, memoranda, and other records as the
Commission deems to be 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
customers with respect to jurisdictional rates for the
transmission of electric energy in interstate com-
merce, the sale of electric energy at wholesale in
interstate commerce, the transportation of natural
gas in interstate commerce, and the sale in inter-
state commerce of natural gas for resale for ultimate
public consumption for domestic, commercial, indus-
trial, or any other use.
(2) AFFILIATE COMPANIES.—Each affiliate of a
holding company or of any subsidiary company of a
holding company shall maintain, and make available
to the Commission, such books, accounts, memo-
randa, and other records with respect to any trans-
action with another affiliate, as the Commission
deems to be 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.
(3) HOLDING COMPANY SYSTEMS.—The Com-
mission may examine the books, accounts, memo-
randa, and other records of any company in a hold-
ing company system, or any affiliate thereof, as the
Commission deems to be relevant to costs incurred
by a public utility or natural gas company within
such holding company system and necessary or ap-
propriate for the protection of utility customers with
respect to jurisdictional rates.
(4) CONFIDENTIALITY.—No member, officer, or
employee of the Commission shall divulge any fact or
information that may come to his or her knowledge
during the course of examination of books, accounts,
memoranda, or other records as provided in this sec-
tion, except as may be directed by the commission
or by a court of competent jurisdiction.
(f) STATE ACCESS TO BOOKS AND RECORDS.—
(1) IN GENERAL.—Upon the written request of
a State commission having jurisdiction to regulate a
public utility company in a holding company system,
and subject to such terms and conditions as may be
necessary and appropriate to safeguard against un-
warranted disclosure to the public of any trade se-
crets or sensitive commercial information, the hold-
ing 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—
(A) have been identified in reasonable de-
tail in a proceeding before the State commis-
sion;
(B) the State commission deems are rel-
evant to costs incurred by such public utility
company; and
(C) are necessary for the effective dis-
charge of the responsibilities of the State com-
mission with respect to such proceeding.
(2) LIMITATION.—Paragraph (1) shall not
apply to any person that is a holding company solely
by reason of ownership of 1 or more qualifying fa-
cilities under the Public Utility Regulatory Policies
Act.
(3) CONFIDENTIALITY OF INFORMATION.—The
production of books, accounts, memoranda, and
other records under paragraph (1) shall be subject
to such terms and conditions as may be necessary
and appropriate to safeguard against unwarranted
disclosure to the public of any trade secrets or sen-
sitive commercial information.
(4) EFFECT ON STATE LAW.—Nothing in this
section shall preempt applicable State law concern-
ing the provision of books, records, or any other in-
formation, or in any way limit the rights of any
State to obtain books, records, or any other informa-
tion under any other Federal law, contract, or other-
wise.
(5) COURT JURISDICTION.—Any United States
district court located in the State in which the State
commission referred to in paragraph (1) is located
shall have jurisdiction to enforce compliance with
this section.
(g) EXEMPTION AUTHORITY.—
(1) RULEMAKING.—Not later than 90 days
after the date of enactment of this Act, the Commis-
sion shall promulgate a final rule to exempt from the
requirements of subsection (e) any person that is a
holding company, solely with respect to 1 or more—
(A) qualifying facilities under the Public
Utility Regulatory Policies Act of 1978;
(B) exempt wholesale generators; or
(C) foreign utility companies.
(2) OTHER AUTHORITY.—If, upon application
or upon its own motion, the Commission finds that
the books, records, accounts, memoranda, and other
records of any person are not relevant to the juris-
dictional rates of a public utility or natural gas com-
pany, or if the Commission finds that any class of
transaction is not relevant to the jurisdictional rates
of a public utility or natural gas company, the Com-
mission shall exempt such person or transaction
from the requirements of subsection (e).
(h) AFFILIATE TRANSACTIONS.—Nothing in this sec-
tion shall preclude the Commission or a State commission
from exercising its jurisdiction under otherwise applicable
law to determine whether a public utility company, public
utility, 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.
(i) APPLICABILITY.—No provision of this section
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), or (3) acting as
such in the course of his or her official duty.
(j) EFFECT ON OTHER REGULATIONS.—Nothing in
this section precludes the Commission or a State commis-
sion from exercising its jurisdiction under otherwise appli-
cable law to protect utility customers.
(k) 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. 825d–825p) to enforce
the provisions of this section.
(l) SAVINGS PROVISIONS.—
(1) IN GENERAL.—Nothing in this section pro-
hibits a person from engaging in or continuing to
engage in activities or transactions in which it is le-
gally engaged or authorized to engage on the effec-
tive date of this Act, if that person continues to
comply with the terms of any such authorization,
whether by rule or by order.
(2) EFFECT ON OTHER COMMISSION AUTHOR-
ITY.—Nothing in this section limits the authority of
the Commission under the Federal Power Act (16
U.S.C. 791a et seq.) (including section 301 of that
Act) or the Natural Gas Act (15 U.S.C. 717 et seq.)
(including section 8 of that Act).
(m) IMPLEMENTATION.—Not later than 18 months
after the date of enactment of this Act, the Commission
shall—
(1) promulgate such regulations as may be nec-
essary or appropriate to implement this section
(other than subsection (f)); and
(2) submit to the Congress detailed rec-
ommendations on technical and conforming amend-
ments to Federal law necessary to carry out this sec-
tion and the amendments made by this section.
(n) TRANSFER
OF
RESOURCES.—All books and
records that relate primarily to the functions transferred
to the Commission under this section shall be transferred
from the Securities and Exchange Commission to the
Commission.
(o) EFFECTIVE DATE.—This section shall take effect
18 months after the date of enactment of this Act.
(p) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated such funds as may be
necessary to carry out this section.
(q) CONFORMING AMENDMENT TO THE FEDERAL
POWER ACT.—Section 318 of the Federal Power Act (16
U.S.C. 825q) is repealed.
SEC. 6. STRANDED COST.
As a condition of recieving Federal energy assistance,
each State that has by law or regulation adopted provi-
sions to provide for the recovery of stranded costs as de-
fined by State law or regulation shall file all such provi-
sions with the Federal Energy Regulatory Commission
and shall not change, amend, modify or repeal such provi-
sions for 7 years after the date of filing with the Commis-
sion. The Commission shall determine by rule the scope
of Federal energy assistance covered by this section, tak-
ing care to encourage to the fullest extent stability con-
cerning the recovery of stranded costs. The Commission
also shall compile and make available to the public all such
provisions and may require any State, as a further condi-
tion of recieving energy assistance, to prepare and file an
explanation of the provision that it has placed on file.
SEC. 7. DISPOSITION OF PROPERTY.
Section 203 of the Federal Power Act is repealed.
SEC. 8. SAVINGS CLAUSE.
Nothing in this Act shall be construed to prohibit any
State from dealing with public welfare issues.
SEC. 9. STUDY.
The Secretary of Energy shall report to Congress
within 2 years after the enactment of this Act on the ex-
tent to which actions taken by the States have removed
regulatory and statutory barriers to interstate commerce
in electricity. The report shall describe any remaining bar-
riers to interstate commerce and shall make recommenda-
tions to the Congress for additional action that may be
necessary to lower and/or eliminate barriers to interstate
commerce in electricity consistent with the development of
a fully competitive marketplace.
Æ