‘‘(2)(A) Any person that provides unbundled retail
transmission or distribution of electric energy in interstate
commerce shall obtain a jurisdictional determination from
the Commission as to which facilities owned, controlled,
or operated by such person are or will be facilities used
for retail transmission in interstate commerce and there-
fore subject to Commission jurisdiction, and which facili-
ties are or will be used for local distribution and therefore
subject to State jurisdiction.
‘‘(B) A person providing services referred to in sub-
paragraph (A) as of the date of enactment of this para-
graph shall file, within 90 days of the date of enactment
of this paragraph, an application for jurisdictional deter-
mination under this paragraph. The Commission, after
consultation with representatives of affected State com-
missions, shall make a jurisdictional determination with
respect to the facilities of such person no later than 18
months after the date the application is filed.
‘‘(C) A person that first provides services referred to
in subparagraph (A) after the date of enactment of this
paragraph shall file an application for jurisdictional deter-
mination under this paragraph no later than 90 days prior
to the date that unbundled retail transmission or distribu-
tion service is to commence. The Commission, after con-
sultation with representatives of the affected State com-
missions, shall make a determination with respect to the
facilities of such person no later than 1 year after the date
the application is filed.
‘‘(3) In making a jurisdictional determination under
paragraph (2), the Commission shall consider the follow-
ing nonexclusive list of factors as indicating that facilities
constitute local distribution facilities subject to State ju-
risdiction:
‘‘(A) Local distribution facilities normally are in
close proximity to retail customers.
‘‘(B) Local distribution facilities are primarily
radial in character.
‘‘(C) Power flows into, but rarely out of, local
distribution systems.
‘‘(D) When power enters a local distribution
system, it is not reconsigned or transported on to
some other market.
‘‘(E) Power entering a local distribution system
is consumed in a comparatively restricted geographi-
cal area.
‘‘(F) Meters are based at the transmission/local
distribution interface to measure flows into the local
distribution system.
‘‘(G) Local distribution systems will be of re-
duced voltage.
The Commission shall also consider the historical uses of
facilities used to deliver electric energy to end users and
other technical factors that may be relevant to a jurisdic-
tional determination. The Commission shall give deference
to State commission recommendations that take into ac-
count the factors described in this subsection and shall
take into account other factors identified by a State com-
mission as relevant to a jurisdictional determination with
respect to facilities located in such State.
‘‘(4) Once the Commission makes a jurisdictional de-
termination under paragraph (2), such determination may
not be modified unless the Commission determines there
is a material change in facts or circumstances since the
time the prior determination was made, or finds that prior
representations or facts were incorrect. The Commission
may modify a prior jurisdictional determination only after
consultation with representatives of the affected State
commission.
‘‘(5) Any person, State, or State commission ag-
grieved by an order making a jurisdictional determination
under paragraph (2) may obtain a review of such order
in the Circuit Court of Appeals of the United States for
any circuit wherein the person to which the order relates
is located or has its principal place of business or in the
United States Court of Appeals for the District of Colum-
bia Circuit, pursuant to section 313.’’
(b) BYPASS.—(1) Notwithstanding the Federal
Power Act, a State or a State regulatory authority (in car-
rying out its authority to regulate facilities 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 municipality of retail elec-
tric energy services, the payment of a charge deemed nec-
essary 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 re-
tail electric service.
(D) To fund assistance to low-income cus-
tomers.
(E) To encourage environmental, renewable en-
ergy, energy efficiency, conservation programs, or
any combination of such programs.
(F) to provide for retraining of electric employ-
ees.
(G) Any combination of the purposes described
in subparagraphs (A) through (F). Notwithstanding
the Federal Power Act, a nonregulated electric util-
ity may also require, as a condition for the purchase
by any person of retail electric energy services, the
payment of a charge deemed necessary by the non-
regulated electric utility for any of such purposes.
(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.
TITLE II—PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935
SEC. 201. APPLICABILITY OF TITLE; RELATIONSHIP TO
PUBLIC UTILITY HOLDING COMPANY ACT OF
1935.
(a) APPLICABILITY OF TITLE.—
(1) IN GENERAL.—This section and section 202
take effect on the date of the enactment of this Act.
(2) 
COMPANY-SPECIFIC
APPLICABILITY
OF
OTHER
PROVISIONS.—Section 203 and the subse-
quent sections of this title take effect for a holding
company, and for each public utility company of the
holding company, on the date on which, pursuant to
subsection (b), the Public Utility Holding Company
Act of 1935 ceases to apply to the holding company
and to each public utility company of the holding
company.
(b) APPLICABILITY OF PUBLIC UTILITY HOLDING
COMPANY ACT
OF 1935; COMPANY-SPECIFIC DETER-
MINATIONS
BY STATES.—The Public Utility Holding
Company Act of 1935 ceases to apply to a holding com-
pany, and to each public utility company of the holding
company, on the date on which all of the following condi-
tions are met:
(1) In the case of each electric utility company
of the holding company, each State in which such
utility company provides electric energy at retail
makes a determination that the retail customers of
the utility company in such State are able to pur-
chase electric energy at retail from any person offer-
ing electric energy to the purchaser on a competi-
tively neutral and nondiscriminatory basis.
(2) In the case of each gas utility company of
the holding company, each State in which such util-
ity company distributes at retail natural or manufac-
tured gas or both (as the case may be) for heat,
light, or power makes a determination that the retail
customers of the utility company in such State are
able to purchase such gas at retail from any person
offering such gas to the purchaser on a competitively
neutral and nondiscriminatory basis.
(3) Each State making a determination under
paragraph (1) or (2) notifies the Commission, and
the Securities and Exchange Commission, of such
determination.
SEC. 202. DEFINITIONS.
For purposes of this title:
(1) The term ‘‘affiliate’’ of a company means
(A) any company 5 percent or more of whose out-
standing voting securities are owned, controlled, or
held with power to vote, directly or indirectly, by
such company; and (B) any person or class of per-
sons that the Commission determines, after appro-
priate notice and opportunity for hearing, to stand
in such relation, directly or indirectly, to such com-
pany that there is likely to be such an absence of
arm’s length bargaining in transactions between
them as to make it necessary or appropriate in the
public interest or for the protection of consumers
that such person be subject to the obligations, du-
ties, and liabilities imposed in this title upon affili-
ates of a 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,
a partnership, an association, a joint-stock company,
a business trust, or an organized group of persons,
whether incorporated or not; or any receiver, trustee,
or other liquidating agent of any of the foregoing in
his capacity as such.
(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.
(7) The term ‘‘gas utility company’’ means any
company that owns or operates facilities used for the
distribution at retail (other than the distribution
only in enclosed portable containers) of natural or
manufactured gas for heat, light, or power.
(8) The term ‘‘holding company’’ means (A)
any company that directly or indirectly owns, con-
trols, or holds with power to vote, 10 percent or
more of the outstanding voting securities of a public
utility company or of a holding company of any pub-
lic utility company; and (B) any person, determined
by the Commission, after notice and opportunity for
hearing, to exercise directly or indirectly (either
alone or pursuant to an arrangement or understand-
ing with 1 or more other persons) such a controlling
influence over the management or policies of any
public utility company or holding company as to
make it necessary or appropriate for the protection
of consumers with respect to rates that such person
be subject to the obligations, duties, and liabilities
imposed in this title upon holding companies.
(9) The term ‘‘holding company system’’ means
a holding company, together with its subsidiary com-
panies.
(10) The term ‘‘jurisdictional rates’’ means
rates established by the Commission for the trans-
mission of electric energy in interstate commerce,
the sale of electric energy at wholesale in interstate
commerce, the transportation of natural gas in inter-
state commerce, and the sale in interstate commerce
of natural gas for resale for ultimate public con-
sumption for domestic, commercial, industrial, or
any other use.
(11) The term ‘‘natural 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) The term ‘‘person’’ means an individual or
company.
(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
sale of electric energy at wholesale in interstate com-
merce.
(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
SEC. 203. FEDERAL ACCESS TO BOOKS AND RECORDS.
(a) HOLDING
COMPANIES
AND
SUBSIDIARIES.—
Every holding company and associate company thereof
shall maintain, and make available to the Commission,
such books, accounts, documents, and other records as the
Commission deems relevant to costs incurred by a public
utility or natural gas company that is an associate com-
pany of such holding company and necessary or appro-
priate for the protection of consumers with respect to ju-
risdictional rates.
(b) AFFILIATES AND SUBSIDIARIES.—Every affiliate
of a holding company or of any subsidiary company there-
of shall maintain, and make available to the Commission,
such books, accounts, documents, and other records with
respect to any transaction that is subject to this title, as
the Commission deems relevant to costs incurred by a pub-
lic utility or natural gas company that is an associate com-
pany of such holding company and necessary or appro-
priate for the protection of consumers with respect to ju-
risdictional rates.
(c) AUTHORITY TO EXAMINE.—The Commission
may examine the books, accounts, documents, and other
records of any company in a holding company system, or
any affiliate thereof, as the Commission deems relevant
to costs incurred by a public utility or natural gas com-
pany within such holding company system and necessary
or appropriate for the protection of consumers with re-
spect 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 knowledge during the course
of examination of books, accounts, documents, and other
records as provided in this section, except insofar as he
may be directed by the Commission or by a court of com-
petent jurisdiction.
SEC. 204. EXEMPTION AUTHORITY REGARDING FEDERAL
ACCESS.
(a) RULEMAKING.—Not later than 90 days after the
enactment of this Act, the Commission shall promulgate
a final rule to exempt from the requirements of section
203 any person that is a holding company, solely with re-
spect to one or more—
(1) qualifying facilities under the Public Utility
Regulatory Policies Act of 1978;
(2) exempt wholesale generators; or
(3) foreign utility companies.
(b) OTHER AUTHORITY.—If, upon application or
upon its own motion, the Commission finds that the books,
accounts, documents, and other records of any person are
not relevant to the jurisdictional rates of a public utility
or a natural gas company, or if the Commission finds that
any class of transactions is not relevant to the jurisdic-
tional rates of a public utility or a natural gas company,
the Commission shall exempt such person or transaction
from the requirements of section 203.
SEC. 205. STATE ACCESS TO BOOKS AND RECORDS.
(a) AUTHORITY.—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 ap-
propriate to safeguard against unwarranted disclosure to
the public of any trade secrets or sensitive commercial in-
formation, a holding company or its associate company or
affiliate thereof, wherever located, shall produce for in-
spection such books, accounts, documents, and other
records that—
(1) have been identified in reasonable detail in
a proceeding before the State commission;
(2) the State commission deems are relevant to
costs incurred by such public utility company; and
(3) are necessary for the effective discharge of
the responsibilities of the State commission with re-
spect to such proceeding.
(b) SAVINGS.—Nothing in this section shall preempt
applicable State law concerning the provision of books, ac-
counts, documents, and other records, or in any way limit
the rights of a State to obtain books, accounts, documents,
and other records under Federal law, contracts, or other-
wise.
(c) COURT JURISDICTION.—Any district court of the
United States located in the State in which the State com-
mission referred to in subsection (a) is located shall have
jurisdiction to enforce compliance with this section.
SEC. 206. AFFILIATE TRANSACTIONS.
Nothing in this title shall preclude the Commission
or a State commission from exercising its jurisdiction
under otherwise applicable law to determine whether a
public utility 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. 207. APPLICATION OF TITLE.
No provision in this title 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 of any corporation that is wholly owned, directly
or indirectly by 1 or more of such entities; 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 official duty.
SEC. 208. EFFECT ON OTHER REGULATION.
Nothing in this title shall preclude the Commission
or a State commission from exercising its jurisdiction
under otherwise applicable law to protect utility consum-
ers.
SEC. 209. 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 title.
SEC. 210. SAVING PROVISIONS.
(a) IN GENERAL.—Nothing in this title prohibits a
person from engaging in or continuing to engage in activi-
ties or transactions in which it is legally engaged or au-
thorized to engage on the date on which the Public Utility
Holding Company Act of 1935 ceases to apply to such
person pursuant to this title, provided that it complies
with the terms of any such authorization, whether by rule
or by order.
TITLE III—PUBLIC UTILITY REG-
ULATORY POLICIES ACT OF
1978
SEC. 301. APPLICATION OF PURPA PROVISIONS.
Section 210 of the Public Utility Regulatory Policies
Act of 1978 is amended by adding the following new sub-
section at the end thereof:
‘‘(m) UTILITIES SUBJECT
TO RETAIL COMPETI-
TION.—
‘‘(1) IN GENERAL.—The preceding provisions of
this section requiring electric utilities to offer to pur-
chase electric energy from qualifying cogeneration
facilities and qualifying small power production fa-
cilities at the incremental cost to the utility of alter-
native electric energy shall cease to apply to an elec-
tric utility if the State makes a determination that
the retail customers of such utility in such State are
able to purchase electric energy at retail from any
person offering electric energy to the purchaser on
a competitively neutral and nondiscriminatory basis
and if the State notifies the Commission of such de-
termination.
‘‘(2) RIGHTS AND REMEDIES NOT AFFECTED.—
Nothing in the Electric Consumers’ Power to Choose
Act of 1997 affects the rights or remedies of any
party with respect to the purchase or sale of electric
energy or capacity from or to a facility determined
to be a qualifying small power production facility or
a qualifying cogeneration facility pursuant to this
Act.’’.
Æ