I
107TH CONGRESS
1ST SESSION
H. R. 1974
To amend the Federal Power Act to provide the Federal Energy Regulatory
Commission with authority to order certain refunds of electric rates,
to require the Commission to expand its market mitigation plan, and
to provide the Secretary of Energy with authority to revoke the market
mitigation plan under certain circumstances, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 23, 2001
Mr. OSE (for himself and Mr. HORN) introduced the following bill; which was
referred to the Committee on Energy and Commerce
A BILL
To amend the Federal Power Act to provide the Federal
Energy Regulatory Commission with authority to order
certain refunds of electric rates, to require the Commis-
sion to expand its market mitigation plan, and to provide
the Secretary of Energy with authority to revoke the
market mitigation plan under certain circumstances, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Western States Energy
Consumer Protection Act of 2001’’.
SEC. 2. FINDINGS.
The Congress finds that—
(1) undue reliance upon the purchase of power
from the spot market has resulted in a dysfunctional
energy market reflected in high spot market prices;
(2) the State of California should encourage
further use of long-term and bilateral contracts and
reduce reliance on the spot market; and
(3) it is not in the interest of the residents of
the State of California for the State to create and
operate a statewide power authority.
SEC. 3. DEFINITIONS.
As used in this Act:
(1) COMMISSION.—The term ‘‘Commission’’
means the Federal Energy Regulatory Commission.
(2) PUBLIC UTILITY.—The term ‘‘public util-
ity’’ has the meaning given the term in section 201
of the Federal Power Act (16 U.S.C. 824).
(3) WHOLESALE ELECTRIC UTILITY.—The term
‘‘wholesale electric utility’’ means a person or entity
(including any Federal, State or local department,
agency, or instrumentality) selling electric power at
wholesale in the western energy market
(4) WESTERN
ENERGY
MARKET.—The term
‘‘western energy market’’ means the area within the
United States that is encompassed by the Western
Systems Coordinating Council (‘‘WSCC’’).
(5) SPOT MARKET.—The terms ‘‘spot market’’
and ‘‘real time market’’ mean the market for electric
energy to be delivered within the next 24-hour pe-
riod, or the spot market as otherwise defined by the
Commission.
(6) RE-MARKETER.—The term ‘‘re-marketer’’
means any person who purchases electric energy at
wholesale for resale at wholesale.
SEC. 4. MARKET MONITORING AND MITIGATION PLAN.
(a) EXPANSION TO WSCC REGION.—The Federal
Energy Regulatory Commission shall issue such orders as
may be necessary to apply to all public utility sales of elec-
tric energy in interstate commerce in the western energy
market the market monitoring and mitigation plan for the
California market (as adopted by order issued on April
26, 2001 (95 FERC 61,115)), that is based not on inflexi-
ble price caps, but on the use of competitive bids to rep-
licate competitive pricing.
(b) SCOPE OF PLAN.—
(1) IN GENERAL.—The orders issued as pro-
vided in subsection (a) shall also modify the market
monitoring and mitigation plan to remove the limita-
tions in such plan regarding emergencies in Cali-
fornia when reserves are 7.5 percent or less so that
such plan will apply to all sales by public utilities in
interstate commerce in the spot market at all times,
including sales by re-marketers.
(2) CERTAIN STATES EXCLUDED.—The market
mitigation plan referred to in this section shall not
apply to sales of electric energy at wholesale for de-
livery in a State that, after the enactment of this
Act—
(A) prohibits the State public utility com-
mission from approving the passing through to
retail consumers of the costs of electric power;
or
(B) imposes a price limit on the sale of
electric energy at retail that precludes a public
utility (or any entity that is authorized to pur-
chase electricity on behalf of a public utility or
a State) from making a payment when due to
any entity within the western energy market
from which the public utility purchases electric
energy for resale at retail within the western
energy market.
(c) DEPARTMENT
OF ENERGY AUTHORITY.—The
Secretary of Energy shall have the authority to terminate
the market mitigation plan referred to in this section at
any time that the Secretary determines that such plan is
resulting in decreased supply or increased demand for
electric energy in the States covered by the Western States
Coordinating Council.
(d) APPLICATION
TO NONJURISDICTIONAL UTILI-
TIES.—It is the intent of Congress that each wholesale
electric utility that is not a public utility subject to the
jurisdiction of the Commission shall voluntarily comply
with the market monitoring and mitigation plan referred
to in subsection (a), as modified by the Commission under
this section.
(e) SUNSET.—The requirements of this section shall
cease to apply as of September 30, 2002.
SEC. 5. NATURAL GAS RATES.
(a) INAPPLICABILITY OF WAIVER OF MAXIMUM RATE
CEILING PROVISION TO TRANSPORTATION OF NATURAL
GAS INTO THE STATE OF CALIFORNIA.—Effective with
respect to contracts entered into after the date of enact-
ment of this Act, paragraph (i) of section 284.8 of title
18, Code of Federal Regulations, shall not apply to the
transportation of natural gas into the State of California
from outside the State.
(b) DISCLOSURE
OF COMMODITY PORTION
AND
TRANSPORTATION PORTION OF SALE PRICE IN BUNDLED
NATURAL GAS TRANSACTIONS.—
(1) DEFINITION OF BUNDLED TRANSACTION.—
In this subsection, the term ‘‘bundled transaction’’
means a transaction for the sale of natural gas in
which the sale price includes both the cost of the
natural gas and the cost of transporting the natural
gas.
(2) DISCLOSURE.—Exercising authority under
section 4 of the Natural Gas Act (15 U.S.C. 717c),
not later than 60 days after the date of enactment
of this Act, the Commission shall publish notice of
a proposed rulemaking, and not later than 180 days
after such date of enactment issue a rule, that re-
quires any person that sells natural gas in a bundled
transaction under which the natural gas is to be
transported into the State of California from outside
the State to file with the Commission, not later than
a date specified by the Commission, a statement
that discloses—
(A) the portion of the sale price that is at-
tributable to the price paid by the seller for the
natural gas; and
(B) the portion of the sale price that is at-
tributable to the price paid for transportation of
the natural gas.
SEC. 6. NO ORDERS TO SELL GAS OR ELECTRICITY WITH-
OUT A REASONABLE ASSURANCE OF PAY-
MENT.
Notwithstanding section 302 of the Natural Gas Pol-
icy Act of 1978 (15 U.S.C. 3362), section 202(c) of the
Federal Power Act (16 U.S.C. 824a(c)), or section 101
of the Defense Production Act of 1950 (50 U.S.C. App.
2071), neither the Secretary of Energy nor the Commis-
sion may issue an order that requires a seller of electric
energy or natural gas to sell, on or after the date of enact-
ment of this Act, electric energy or natural gas to a buyer
in any State in the western region unless there is a reason-
able assurance that the Commission determines is suffi-
cient to ensure that the seller will be paid—
(1) the full purchase price when due, as agreed
to by the buyer and seller; or
(2) if the buyer and seller are unable to agree
on—
(A) a fair and equitable price for natural
gas, as determined by the President under sec-
tion 302 of the Natural Gas Policy Act of 1978
(15 U.S.C. 3362); or
(B) a just and reasonable price for electric
energy, as determined by the Secretary of En-
ergy or the Commission, as appropriate, under
section 202(c) of the Federal Power Act (16
U.S.C. 824a(c)).
SEC. 7. REQUIREMENT TO MEET IN-STATE DEMAND.
Notwithstanding any other provision of law, a State
public utility commission in the western energy market
may prohibit any utility subject to the jurisdiction of the
State public utility commission from making any sale of
electric energy to a purchaser outside the service area of
the utility at any time at which the State public utility
commission has reason to believe that delivery of the elec-
tric energy would impair the ability of the utility to meet,
at or after the time of the delivery, the demand for electric
energy in the service area of the utility.
SEC. 8. WHOLESALE RATE REFUND AUTHORITY.
Section 206(b) of the Federal Power Act (16 U.S.C.
824e(b)) is amended as follows:
(1) In the second sentence, strike ‘‘shall not be
earlier than the date 60 days after the filing of such
complaint nor later than 5 months after the expira-
tion of such 60-day period’’ and insert ‘‘shall be the
date of the filing of such complaint’’.
(2) In the third sentence, strike ‘‘shall not be
earlier than the date 60 days after the publication
by the Commission of notice of its intention to ini-
tiate such proceeding nor later than 5 months after
the expiration of such 60-day period’’ and insert
‘‘shall be the date of publication by the Commission
of notice of its intention to initiate such proceeding’’.
(3) Beginning in the seventh sentence, strike
‘‘through a date fifteen months after such refund ef-
fective date’’ and all that follows down through
‘‘prior to the conclusion of the proceeding’’ and in-
sert ‘‘through the conclusion of the proceeding’’.
(4) In the last sentence, after ‘‘interest’’ insert
‘‘and any penalties the Commission deems appro-
priate’’.
SEC. 9. FERC REPORT ON SCHEDULED OUTAGES.
Within 180 days after the enactment of this Act, the
Commission shall undertake a study of the means avail-
able to improve Commission oversight to investigate and
coordinate scheduled outages by electric powerplants. The
Commission shall submit a report to Congress containing
the findings of such study.
SEC. 10. EFFECT OF ACT.
Nothing in this Act—
(1) affects any energy production that, as of
the date of enactment of this Act, is not online and
for which an application for a permit to produce
electricity has not been filed;
(2) affects any contract for the purchase of
electric energy except a contract for a spot market
purchase;
(3) prohibits a State or other entity from ap-
pearing in a Federal court in any instance in which
it is alleged that the Commission is not enforcing
the Federal Power Act (16 U.S.C. 791a et seq.); or
(4) diminishes or has any other effect on the
authority of a State regulatory authority (as defined
in section 3 of the Federal Power Act (16 U.S.C.
796)) to regulate rates and charges for the sale of
electric energy to consumers, including the authority
to determine the manner in which wholesale rates
shall be passed through to consumers (including the
setting of tiered pricing, real-time pricing, and base-
line rates).
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