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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. If an ISO
in the Western Interconnection had allocated financial
transmission rights prior to the date of enactment of this
section but had not done so with respect to one or more
load-serving entities’ firm transmission rights held under
contracts to which the preceding sentence applies (or held
by reason of ownership of transmission facilities), such
load-serving entities may not be required, without their
consent, to convert such firm transmission rights to
tradable or financial rights, except where the load-serving
entity has voluntarily joined the ISO as a participating
transmission owner (or its successor) in accordance with
the ISO tariff.
‘‘(f) WATER PUMPING FACILITIES.—The Commis-
sion shall ensure that any entity described in section
201(f) that owns transmission facilities used predomi-
564
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) FERC RULEMAKING ON LONG-TERM TRANS-
MISSION RIGHTS IN ORGANIZED MARKETS.—Within one
year after the date of enactment of this section and after
notice and an opportunity for comment, the Commission
shall by rule or order implement subsection (a)(3) in Com-
mission-approved RTOs and ISOs with organized elec-
tricity markets.
‘‘(h) ERCOT.—This section shall not apply within
the area referred to in section 212(k)(2)(A).
‘‘(i) JURISDICTION.—This section does not authorize
the Commission to take any action not otherwise within
its jurisdiction.
‘‘(j) 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.
‘‘(k) 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-
565
nessee Valley Authority shall be deemed to hold firm
transmission rights for the transmission of such power.
‘‘(l) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘distribution utility’ means an
electric utility that has a service obligation to end-
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.’’.