533
(c) IMPLEMENTATION.—The Secretary shall consider 
implementing this program using a consortium of indus-
try, university and national laboratory participants. 
(d) REPORT.—Not later than 2 years after the trans-
mittal of the plan under subsection (b), the Secretary shall 
transmit a report to Congress describing the progress 
made under this section and identifying any additional re-
sources needed to continue the development and commer-
cial application of transmission and distribution infra-
structure technologies. 
(e) POWER DELIVERY RESEARCH INITIATIVE.—
(1) IN GENERAL.—The Secretary shall establish 
a research, development, demonstration, and com-
mercial application initiative specifically focused on 
power delivery utilizing components incorporating 
high temperature superconductivity. 
(2) GOALS.—The goals of this initiative shall be 
to—
(A) establish facilities to develop high tem-
perature superconductivity power applications 
in partnership with manufacturers and utilities; 
(B) provide technical leadership for estab-
lishing reliability for high temperature super-
conductivity power applications including suit-
able modeling and analysis;
534
(C) facilitate commercial transition toward 
direct current power transmission, storage, and 
use for high power systems utilizing high tem-
perature superconductivity; and 
(D) facilitate the integration of very low 
impedance high temperature superconducting 
wires and cables in existing electric networks to 
improve system performance, power flow control 
and reliability. 
(3) REQUIREMENTS.—The initiative shall in-
clude—
(A) feasibility analysis, planning, research, 
and design to construct demonstrations of 
superconducting links in high power, direct cur-
rent and controllable alternating current trans-
mission systems; 
(B) public-private partnerships to dem-
onstrate deployment of high temperature super-
conducting cable into testbeds simulating a re-
alistic transmission grid and under varying 
transmission conditions, including actual grid 
insertions; and 
(C) testbeds developed in cooperation with 
national laboratories, industries, and univer-
sities to demonstrate these technologies, pre-
535
pare the technologies for commercial introduc-
tion, and address cost or performance road-
blocks to successful commercial use. 
(4) AUTHORIZATION OF APPROPRIATIONS.—For 
purposes of carrying out this subsection, there are 
authorized to be appropriated—
(A) for fiscal year 2006, $15,000,000; 
(B) for fiscal year 2007, $20,000,000; 
(C) for fiscal year 2008, $30,000,000; 
(D) for fiscal year 2009, $35,000,000; and 
(E) for fiscal year 2010, $40,000,000. 
SEC. 1226. ADVANCED POWER SYSTEM TECHNOLOGY IN-
CENTIVE PROGRAM. 
(a) PROGRAM.—The Secretary of Energy is author-
ized to establish an Advanced Power System Technology 
Incentive Program to support the deployment of certain 
advanced power system technologies and to improve and 
protect certain critical governmental, industrial, and com-
mercial processes. Funds provided under this section shall 
be used by the Secretary to make incentive payments to 
eligible owners or operators of advanced power system 
technologies to increase power generation through en-
hanced operational, economic, and environmental perform-
ance. Payments under this section may only be made upon
536
receipt by the Secretary of an incentive payment applica-
tion establishing an applicant as either—
(1) a qualifying advanced power system tech-
nology facility; or 
(2) a qualifying security and assured power fa-
cility. 
(b) INCENTIVES.—Subject to availability of funds, a 
payment of 1.8 cents per kilowatt-hour shall be paid to 
the owner or operator of a qualifying advanced power sys-
tem technology facility under this section for electricity 
generated at such facility. An additional 0.7 cents per kilo-
watt-hour shall be paid to the owner or operator of a quali-
fying security and assured power facility for electricity 
generated at such facility. Any facility qualifying under 
this section shall be eligible for an incentive payment for 
up to, but not more than, the first 10,000,000 kilowatt-
hours produced in any fiscal year. 
(c) ELIGIBILITY.—For purposes of this section: 
(1) QUALIFYING
ADVANCED
POWER
SYSTEM 
TECHNOLOGY FACILITY.—The term ‘‘qualifying ad-
vanced power system technology facility’’ means a 
facility using an advanced fuel cell, turbine, or hy-
brid power system or power storage system to gen-
erate or store electric energy.
537
(2) QUALIFYING
SECURITY
AND
ASSURED 
POWER
FACILITY.—The term ‘‘qualifying security 
and assured power facility’’ means a qualifying ad-
vanced power system technology facility determined 
by the Secretary of Energy, in consultation with the 
Secretary of Homeland Security, to be in critical 
need of secure, reliable, rapidly available, high-qual-
ity power for critical governmental, industrial, or 
commercial applications. 
(d) AUTHORIZATION.—There are authorized to be ap-
propriated to the Secretary of Energy for the purposes 
of this section, $10,000,000 for each of the fiscal years 
2006 through 2012. 
SEC. 1227. OFFICE OF ELECTRIC TRANSMISSION AND DIS-
TRIBUTION. 
(a) CREATION OF AN OFFICE OF ELECTRIC TRANS-
MISSION AND DISTRIBUTION.—Title II of the Department 
of Energy Organization Act (42 U.S.C. 7131 et seq.) (as 
amended by section 502(a) of this Act) is amended by in-
serting the following after section 217, as added by title 
V of this Act: 
‘‘SEC. 218. OFFICE OF ELECTRIC TRANSMISSION AND DIS-
TRIBUTION. 
‘‘(a) ESTABLISHMENT.—There is established within 
the Department an Office of Electric Transmission and
538
Distribution. This Office shall be headed by a Director, 
subject to the authority of the Secretary. The Director 
shall be appointed by the Secretary. The Director shall 
be compensated at the annual rate prescribed for level IV 
of the Executive Schedule under section 5315 of title 5, 
United States Code. 
‘‘(b) DIRECTOR.—The Director shall—
‘‘(1) coordinate and develop a comprehensive, 
multi-year strategy to improve the Nation’s elec-
tricity transmission and distribution; 
‘‘(2) implement or, where appropriate, coordi-
nate the implementation of, the recommendations 
made in the Secretary’s May 2002 National Trans-
mission Grid Study; 
‘‘(3) oversee research, development, and dem-
onstration to support Federal energy policy related 
to electricity transmission and distribution; 
‘‘(4) grant authorizations for electricity import 
and export pursuant to section 202(c), (d), (e), and 
(f) of the Federal Power Act (16 U.S.C. 824a); 
‘‘(5) perform other functions, assigned by the 
Secretary, related to electricity transmission and dis-
tribution; and 
‘‘(6) develop programs for workforce training in 
power and transmission engineering.’’.
539
(b) CONFORMING AMENDMENTS.—(1) The table of 
contents of the Department of Energy Organization Act 
(42 U.S.C. 7101 note) is amended by inserting after the 
item relating to section 217 the following new item:
‘‘Sec. 218. Office of Electric Transmission and Distribution.’’.
(2) Section 5315 of title 5, United States Code, is 
amended by inserting after the item relating to ‘‘Inspector 
General, Department of Energy.’’ the following: 
‘‘Director, Office of Electric Transmission and 
Distribution, Department of Energy.’’. 
Subtitle C—Transmission 
Operation Improvements 
SEC. 1231. OPEN NONDISCRIMINATORY ACCESS. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by inserting after section 211 the fol-
lowing new section: 
‘‘SEC. 211A. OPEN ACCESS BY UNREGULATED TRANSMIT-
TING UTILITIES. 
‘‘(a) TRANSMISSION SERVICES.—Subject to section 
212(h), the Commission may, by rule or order, require an 
unregulated transmitting utility to provide transmission 
services—
‘‘(1) at rates that are comparable to those that 
the unregulated transmitting utility charges itself; 
and
540
‘‘(2) on terms and conditions (not relating to 
rates) that are comparable to those under which 
such unregulated transmitting utility provides trans-
mission services to itself and that are not unduly 
discriminatory or preferential. 
‘‘(b) EXEMPTION.—The Commission shall exempt 
from any rule or order under this section any unregulated 
transmitting utility that—
‘‘(1) sells no more than 4,000,000 megawatt 
hours of electricity per year; or 
‘‘(2) does not own or operate any transmission 
facilities that are necessary for operating an inter-
connected transmission system (or any portion 
thereof); or 
‘‘(3) meets other criteria the Commission deter-
mines to be in the public interest. 
‘‘(c) LOCAL DISTRIBUTION FACILITIES.—The re-
quirements of subsection (a) shall not apply to facilities 
used in local distribution. 
‘‘(d) EXEMPTION
TERMINATION.—Whenever the 
Commission, after an evidentiary hearing held upon a 
complaint and after giving consideration to reliability 
standards established under section 215, finds on the 
basis of a preponderance of the evidence that any exemp-
tion granted pursuant to subsection (b) unreasonably im-
541
pairs the continued reliability of an interconnected trans-
mission system, it shall revoke the exemption granted to 
that transmitting utility. 
‘‘(e) APPLICATION
TO UNREGULATED TRANSMIT-
TING UTILITIES.—The rate changing procedures applica-
ble to public utilities under subsections (c) and (d) of sec-
tion 205 are applicable to unregulated transmitting utili-
ties for purposes of this section. 
‘‘(f) REMAND.—In exercising its authority under 
paragraph (1) of subsection (a), the Commission may re-
mand transmission rates to an unregulated transmitting 
utility for review and revision where necessary to meet the 
requirements of subsection (a). 
‘‘(g) OTHER REQUESTS.—The provision of trans-
mission services under subsection (a) does not preclude a 
request for transmission services under section 211. 
‘‘(h) LIMITATION.—The Commission may not require 
a State or municipality to take action under this section 
that would violate a private activity bond rule for purposes 
of section 141 of the Internal Revenue Code of 1986 (26 
U.S.C. 141). 
‘‘(i) TRANSFER OF CONTROL OF TRANSMITTING FA-
CILITIES.—Nothing in this section authorizes the Commis-
sion to require an unregulated transmitting utility to 
transfer control or operational control of its transmitting
542
facilities to an RTO or any other Commission-approved 
independent transmission organization designated to pro-
vide nondiscriminatory transmission access. 
‘‘(j) DEFINITION.—For purposes of this section, the 
term ‘unregulated transmitting utility’ means an entity 
that—
‘‘(1) owns or operates facilities used for the 
transmission of electric energy in interstate com-
merce; and 
‘‘(2) is an entity described in section 201(f).’’. 
SEC. 1232. SENSE OF CONGRESS ON REGIONAL TRANS-
MISSION ORGANIZATIONS. 
It is the sense of Congress that, in order to promote 
fair, open access to electric transmission service, benefit 
retail consumers, facilitate wholesale competition, improve 
efficiencies in transmission grid management, promote 
grid reliability, remove opportunities for unduly discrimi-
natory or preferential transmission practices, and provide 
for the efficient development of transmission infrastruc-
ture needed to meet the growing demands of competitive 
wholesale power markets, all transmitting utilities in inter-
state commerce should voluntarily become members of Re-
gional Transmission Organizations as defined in section 
3 of the Federal Power Act.
543
SEC. 1233. REGIONAL TRANSMISSION ORGANIZATION AP-
PLICATIONS PROGRESS REPORT. 
Not later than 120 days after the date of enactment 
of this section, the Federal Energy Regulatory Commis-
sion shall submit to Congress a report containing each of 
the following: 
(1) A list of all regional transmission organiza-
tion applications filed at the Commission pursuant 
to subpart F of part 35 of title 18, Code of Federal 
Regulations (in this section referred to as ‘‘Order 
No. 2000’’), including an identification of each pub-
lic utility and other entity included within the pro-
posed membership of the regional transmission orga-
nization. 
(2) A brief description of the status of each 
pending regional transmission organization applica-
tion, including a precise explanation of how each 
fails to comply with the minimal requirements of 
Order No. 2000 and what steps need to be taken to 
bring each application into such compliance. 
(3) For any application that has not been fi-
nally approved by the Commission, a detailed de-
scription of every aspect of the application that the 
Commission has determined does not conform to the 
requirements of Order No. 2000.
544
(4) For any application that has not been fi-
nally approved by the Commission, an explanation 
by the Commission of why the items described pur-
suant to paragraph (3) constitute material non-
compliance with the requirements of the Commis-
sion’s Order No. 2000 sufficient to justify denial of 
approval by the Commission. 
(5) For all regional transmission organization 
applications filed pursuant to the Commission’s 
Order No. 2000, whether finally approved or not—
(A) a discussion of that regional trans-
mission organization’s efforts to minimize rate 
seams between itself and—
(i) other regional transmission organi-
zations; and 
(ii) entities not participating in a re-
gional transmission organization; 
(B) a discussion of the impact of such 
seams on consumers and wholesale competition; 
and 
(C) a discussion of minimizing cost-shifting 
on consumers. 
SEC. 1234. FEDERAL UTILITY PARTICIPATION IN REGIONAL 
TRANSMISSION ORGANIZATIONS. 
(a) DEFINITIONS.—For purposes of this section—
545
(1) APPROPRIATE FEDERAL REGULATORY AU-
THORITY.—The term ‘‘appropriate Federal regu-
latory authority’’ means—
(A) with respect to a Federal power mar-
keting agency (as defined in the Federal Power 
Act), the Secretary of Energy, except that the 
Secretary may designate the Administrator of a 
Federal power marketing agency to act as the 
appropriate Federal regulatory authority with 
respect to the transmission system of that Fed-
eral power marketing agency; and 
(B) with respect to the Tennessee Valley 
Authority, the Board of Directors of the Ten-
nessee Valley Authority. 
(2) FEDERAL
UTILITY.—The term ‘‘Federal 
utility’’ means a Federal power marketing agency or 
the Tennessee Valley Authority. 
(3) TRANSMISSION SYSTEM.—The term ‘‘trans-
mission system’’ means electric transmission facili-
ties owned, leased, or contracted for by the United 
States and operated by a Federal utility. 
(b) TRANSFER.—The appropriate Federal regulatory 
authority is authorized to enter into a contract, agreement 
or other arrangement transferring control and use of all 
or part of the Federal utility’s transmission system to an