H. R. 6—373
(B) identifying and resolving problems in transmission 
and distribution networks, including 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 consumers can take 
to participate in these demand response programs. 
(3) REPORT.—Not later than 1 year after the date of enact-
ment of the Energy Policy Act of 2005, the Commission shall 
prepare and publish an annual report, by appropriate region, 
that assesses demand response resources, including those avail-
able from all consumer classes, and which identifies and 
reviews— 
(A) saturation and penetration rate of advanced meters 
and communications technologies, devices and systems; 
(B) existing demand response programs and time-based 
rate programs; 
(C) the annual resource contribution of demand 
resources; 
(D) the potential for demand response as a quantifiable, 
reliable resource for regional planning purposes; 
(E) steps taken to ensure that, in regional transmission 
planning and operations, demand resources are provided 
equitable treatment as a quantifiable, reliable resource rel-
ative to the resource obligations of any load-serving entity, 
transmission provider, or transmitting party; and 
(F) regulatory barriers to improve customer participa-
tion in demand response, peak reduction and critical period 
pricing programs. 
(f) 
FEDERAL
ENCOURAGEMENT
OF
DEMAND
RESPONSE 
DEVICES.—It is the policy of the United States that time-based 
pricing and other forms of demand response, whereby electricity 
customers are provided with electricity price signals and the ability 
to benefit by responding to them, shall be encouraged, the deploy-
ment of such technology and devices that enable electricity cus-
tomers to participate in such pricing and demand response systems 
shall be facilitated, and unnecessary barriers to demand response 
participation in energy, capacity and ancillary service markets shall 
be eliminated. It is further the policy of the United States that 
the benefits of such demand response that accrue to those not 
deploying such technology and devices, but who are part of the 
same regional electricity entity, shall be recognized. 
(g) 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: 
‘‘(4)(A) Not later than 1 year 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 commence the 
consideration referred to in section 111, or set a hearing date 
for such consideration, with respect to the standard established 
by paragraph (14) of section 111(d). 
‘‘(B) Not later than 2 years after the date of the enactment 
of this paragraph, each State regulatory authority (with respect 
to each electric utility for which it has ratemaking authority),
H. R. 6—374
and each nonregulated electric utility, shall complete the consid-
eration, and shall make the determination, referred 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 subsection 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 METERING STAND-
ARDS.— 
(1) IN GENERAL.—Section 112 of the Public Utility Regu-
latory Policies Act of 1978 (16 U.S.C. 2622) is amended by 
adding at the end the following: 
‘‘(e) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this 
section shall not apply to the standard established 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 rel-
evant nonregulated electric utility has conducted a proceeding 
to consider implementation of the standard concerned (or a 
comparable standard) for such utility within the previous 3 
years; or 
‘‘(3) the State legislature has voted on the implementation 
of such standard (or a comparable standard) for such utility 
within the previous 3 years.’’. 
(2) CROSS REFERENCE.—Section 124 of such Act (16 U.S.C. 
2634) is amended by adding the following at the end thereof: 
‘‘In the case of the standard established by paragraph (14) 
of section 111(d), the reference 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 paragraph (14).’’. 
SEC. 1253. COGENERATION AND SMALL POWER PRODUCTION PUR-
CHASE AND SALE REQUIREMENTS. 
(a) TERMINATION OF MANDATORY PURCHASE AND SALE REQUIRE-
MENTS.—Section 210 of the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 824a–3) is amended by adding at the end the 
following: 
‘‘(m) TERMINATION
OF
MANDATORY
PURCHASE
AND
SALE 
REQUIREMENTS.— 
‘‘(1) OBLIGATION TO PURCHASE.—After the date of enact-
ment of this subsection, no electric utility shall be required 
to enter into a new contract or obligation to purchase electric 
energy from a qualifying 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 nondiscrim-
inatory access to— 
‘‘(A)(i) independently administered, auction-based day 
ahead and real time wholesale markets for the sale of 
electric energy; and (ii) wholesale markets for long-term 
sales of capacity and electric energy; or
H. R. 6—375
‘‘(B)(i) transmission and interconnection services that 
are provided by a Commission-approved regional trans-
mission entity and administered pursuant to an open access 
transmission tariff that affords nondiscriminatory treat-
ment to all customers; and (ii) competitive wholesale mar-
kets 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 
facility is interconnected. In determining whether a mean-
ingful opportunity to sell exists, the Commission shall con-
sider, among other factors, evidence of transactions within 
the relevant market; or 
‘‘(C) wholesale markets for the sale of capacity and 
electric energy that are, at a minimum, of comparable 
competitive quality as markets described in subparagraphs 
(A) and (B). 
‘‘(2) REVISED
PURCHASE
AND
SALE
OBLIGATION
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 facilities 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 notice of self-
certification, self recertification or an application for 
Commission certification under 18 CFR 292.207 prior to 
the date on which the Commission issues the final rule 
required by subsection (n). 
‘‘(3) COMMISSION REVIEW.—Any electric utility may file an 
application with the Commission for relief from the mandatory 
purchase obligation pursuant 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 subparagraph (A), (B), or (C) of para-
graph (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 applica-
tion regarding whether the conditions set forth in subparagraph 
(A), (B), or (C) of paragraph (1) have been met. 
‘‘(4) REINSTATEMENT OF OBLIGATION TO PURCHASE.—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 power production facility, a State agency, or any other 
affected person may apply to the Commission for an order 
reinstating the electric utility’s obligation to purchase electric 
energy under this section. Such application shall set forth the 
factual basis upon which the application is based and describe