I
105TH CONGRESS
1ST SESSION
H. R. 2988
To facilitate the operation, maintenance, and upgrade of certain federally
owned hydroelectric power generating facilities, to ensure the recovery
of costs, and to improve the ability of the Federal Government to coordi-
nate its generating and marketing of electricity with the non-Federal
electric utility industry.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 9, 1997
Mr. DOOLITTLE introduced the following bill; which was referred to the Com-
mittee on Resources, and in addition to the Committees on Commerce
and Transportation and Infrastructure, for a period to be subsequently
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned
A BILL
To facilitate the operation, maintenance, and upgrade of
certain federally owned hydroelectric power generating
facilities, to ensure the recovery of costs, and to improve
the ability of the Federal Government to coordinate its
generating and marketing of electricity with the non-
Federal electric utility industry.
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 ‘‘Federal Power Market-
ing Act of 1997’’.
SEC. 2. PURPOSES.
The purposes of this Act are:
(1) To amend the Department of Energy Orga-
nization Act (91 Stat. 565; 42 U.S.C. 7101, et seq.)
to clarify the authorities of the Secretary of Energy
regarding the Federal Power Marketing Administra-
tions.
(2) To provide additional and more broadly dis-
tributed benefits from Federal hydroelectric re-
sources subject to control by the Federal Power
Marketing Administrations.
(3) To eliminate the backlog of maintenance
and improvement projects at Federal hydroelectric
generating facilities through out sourcing such ac-
tivities on a competitive basis.
(4) To provide adequate funding, through user
fees, for all routine operation and maintenance re-
quirements at Federal hydroelectric generating
projects, as well as those maintenance and improve-
ment projects that are not successfully outsourced.
(5) To recover fully from Federal Power Mar-
keting Administration energy customers all costs in-
curred for the generation and marketing of Federal
energy sold to such customers.
SEC. 3. RELATIONSHIP TO OTHER LAW.
The provisions of this Act shall apply notwithstand-
ing any provision to the contrary of the Act of June 17,
1902, ch. 1093, commonly known as the Reclamation Act
of 1902, (32 Stat. 388, 43 U.S.C. 371 et seq.) and all
laws supplemental thereto; the Flood Control Act of 1944,
Act of December 22, 1944 (58 Stat. 887, 16 U.S.C. 460d
et seq.); the Bonneville Project Act of 1937, Act of August
20, 1937 (50 Stat. 731, 16 U.S.C. 832 et seq.); the Fed-
eral Columbia River Transmission System Act, Act of Oc-
tober 18, 1974, Public Law 93–454 (88 Stat. 1376, 16
U.S.C. 838 et seq.); and the Pacific Northwest Electric
Power Planning and Conservation Act of 1980, Act of De-
cember 5, 1980, Public Law 96–501 (94 Stat. 2697, 16
U.S.C. 839); and section 2406 of the Energy Policy Act
of 1992 (106 Stat. 3099, 16 U.S.C. 839d–1)
TITLE I—OPERATIONS AND
MAINTENANCE
SEC. 101. OUTSOURCING OF MAINTENANCE AND IMPROVE-
MENT PROJECTS.
(a) INVENTORY
OF PROJECTS.—The Secretary of
Energy, in cooperation with the Secretary of the Army
(acting through the Chief of Engineers) and the Secretary
of the Interior (acting through the Commissioner of Rec-
lamation) shall develop and publish in the Federal Reg-
ister on an annual basis an inventory of uncompleted
projects for the maintenance and improvement of hydro-
electric generating facilities owned by the United States
and operated by the Department of the Army Corps of
Engineers and the Bureau of Reclamation of the United
States Department of the Interior. Such inventory shall
include, but not be limited to, maintenance and capital im-
provement projects that will—
(1) restore hydroelectric generating capacity
that has been degraded as a result of deferred main-
tenance or other reasons,
(2) maintain existing generating facilities at
their design specifications, or
(3) replace existing hydroelectric generating
equipment with more efficient equipment capable of
increased hydroelectric power generating capacity.
For each project contained in the inventory, the Secretary
shall provide a statement of the baseline of annual hydro-
electric generation produced from the project.
The initial inventory shall be published no later than 6
months after the date of the enactment of this Act.
(b) CRITERIA AND PROCEDURES FOR COMPETITIVE
OUTSOURCING
OF MAINTENANCE
AND IMPROVEMENT
PROJECTS.—The Secretary of Energy, in consultation
with the Secretary of the Army (acting through the Chief
of Engineers), and the Secretary of the Interior (acting
through the Commissioner of Reclamation), shall develop
and publish a notice in the Federal Register of a rule-
making to establish a process for competitive outsourcing
of maintenance and improvement projects. Such process
shall include—
(1) 
performance 
specifications 
for 
the
outsourcing 
of 
maintenance 
and 
improvement
projects, including minimum safety, reliability and
maintenance requirements;
(2) any requirements necessary to ensure oper-
ational compatibility of the maintenance and im-
provement project with other aspects of Federal
projects;
(3) requirements for the contractor’s proposed
plan for undertaking the maintenance and improve-
ment projects, including financing, management, en-
vironmental compliance, and power marketing; and
(4) any requirement to ensure that the Federal
Government incurs no significant costs or risks re-
sulting from the maintenance and improvement
project.
The Secretary shall not prescribe engineering design speci-
fications for the maintenance and improvement projects.
The Secretary shall make available any supporting analy-
sis and data for these projects. The Secretary shall permit
access to facilities and records to prospective contractors
for purposes of preparing proposals. Notice under this
subsection shall be published for review and comment no
later than 90 days after the enactment of this Act.
(c) SUBMISSION OF PROPOSALS FOR MAINTENANCE
AND IMPROVEMENT PROJECTS.—The Secretary of the
Army (acting through the Chief of Engineers) and the
Secretary of the Interior (acting through the Commis-
sioner of Reclamation) shall, within 30 days of final publi-
cation of each annual inventory under subsection (a), seek
proposals from qualified contractors to undertake the
maintenance and improvement projects identified in that
inventory. Contractor proposals shall contain the informa-
tion specified in the criteria and procedures of subsection
(b), and shall provide a proposed bonus payment to the
Federal Government for the right to undertake the main-
tenance and improvement project.
(d) AWARDING OF CONTRACTS FOR MAINTENANCE
AND IMPROVEMENT PROJECTS.—(1) The Secretary con-
cerned shall select a winning contractor from among the
competing qualified proposals based upon the highest bid
provided to the Government.
(2) The Secretary shall provide the winning contrac-
tor the right to a contract to receive a comparable percent-
age of the total hydroelectric energy generated by the Fed-
eral hydroelectric generating facility concerned that rep-
resents the increase in generation benefit resulting from
the Federal hydroelectric generating facility concerned
that represents the increase in generation benefit resulting
from the completion of the project. The percentage in-
crease in hydroelectric generation shall be calculated as
the difference between the estimated total hydroelectric
generation (as specified pursuant to the last sentence of
subsection (a) of section 101) for the Federal hydroelectric
generation facility existing at the time of the inventory
and the increased generation benefit resulting from imple-
mentation of the maintenance and improvement project.
The contract shall not exceed the estimated useful life of
the maintenance and improvement project.
(3) The contract for hydroelectric generation shall
constitute the sole and exclusive right of the contractor
in the Federal hydroelectric generating asset. Ownership
of all physical assets shall remain with the United States.
(e) PROVISION FOR MAINTENANCE AND IMPROVE-
MENT PROJECTS THAT ARE NOT OUTSOURCED.—If no
proposals are received for particular maintenance and im-
provement projects, or if the proposals are determined to
be unacceptable, the Secretary concerned may proceed
with the proposed project under section 102, subject to
a specific appropriation by Congress of funds for such pur-
pose. The Secretary shall make public the basis for any
such determination.
(f) UNSOLICITED PROPOSALS.—After publication of
the inventory under subsection (a), any contractor may
submit an unsolicited proposal to undertake a mainte-
nance and improvement project at a Federal hydroelectric
generating facility. Each unsolicited proposal shall docu-
ment that the proposed maintenance and improvement
project meets the criteria specified in subsection (b) and
was not identified in the inventory developed under sub-
section (a). If the proper documentation is provided, the
Secretary of the Army (acting through the Chief of Engi-
neers) or the Secretary of the Interior (acting through the
Commissioner of Reclamation), as the case may be, shall
enter into a negotiated contract with such contractor with-
in 120 days after receipt of the proposal without further
competition. Such a contract shall provide for the contrac-
tor to undertake the proposed maintenance and improve-
ment project in exchange for a contract for the percentage
increase in hydroelectric generation achieved from such
activity, calculated on the same basis as described in sub-
section (d). Such a contract shall be for a period of not
to exceed 25 years or the estimated useful life of the main-
tenance and improvement project, whichever is less. The
contractor shall make annual payments to the Federal
Government based on a percentage of the revenue realized
by the contractor from the sale of such hydroelectric gen-
eration. Such payments shall be made at the same rate
as the annual average rate of interest paid by the United
States Treasury on long-term securities of comparable ma-
turity in the preceding year.
(g) AUTHORIZATION
FOR
REPROGRAMMING
OF
FUNDS FROM EXISTING MAINTENANCE AND IMPROVE-
MENT PROJECTS.—The Secretary of the Army (acting
through the Chief of Engineers) or the Secretary of the
Interior (acting through the Commissioner of Reclama-
tion), as the case may be, shall include in the inventory
developed under subsection (a) uncompleted maintenance
and improvement projects that have received appropria-
tions. Such Secretary may award contracts for the comple-
tion of such projects under the provisions of this section.
Any unobligated or unexpended funds previously appro-
priated for such activities may be proposed for reallocation
to other authorized purposes, subject to reprogramming
procedures established in appropriations Acts.
SEC. 102. USER FEE FINANCING OF HYDROELECTRIC GEN-
ERATION OPERATIONS AND MAINTENANCE.
(a) ELIGIBLE PROJECT ACTIVITIES.—Routine oper-
ations and any maintenance or improvement projects that
are not successfully outsourced pursuant to the provisions
of section 101 shall be eligible for user fee financing under
this section.
(b) ESTABLISHMENT OF FEES.—The Secretary of
Energy shall establish a user fee to fully offset appropria-
tions made for eligible hydroelectric generating mainte-
nance and improvement projects described in subsection
(a). The user fee shall be in the form of a surcharge on
rates for electric energy and shall be collected from cus-
tomers who purchase electric energy from the Federal
Power Marketing Administration concerned. The user fee
shall become effective at the beginning of the first fiscal
year after enactment of this Act, and shall remain in effect
for each fiscal year thereafter.
(c) AMOUNT OF FEE.—The fee imposed for each
project under this section shall be established in appro-
priations Acts at a level such that the estimated aggregate
receipts from the fee during a fiscal year shall be equal
to the amounts made available by the Congress in such
appropriation Acts for the project concerned.
(d) RELATIONSHIP TO FULL COST RECOVERY.—(1)
Any costs that are paid through appropriations offset by
user fees shall be excluded from the power rate require-
ments of title II of this Act and any electric energy rates
established therefrom.
(2) Any costs for hydroelectric power operation and
maintenance, improvements or upgrades that are paid
through any means other than those provided in sections
101 and this section shall be included in the power rate
requirements of title II of this Act, and payments for such
costs shall not be used to reduce rates for electric energy.
SEC. 103. CUSTOMER PARTICIPATION.
In the implementation of the provisions of sections
101 and 102, the Secretary of Energy shall consult with
customer groups and solicit their views and recommenda-
tions. The Secretary shall seek to ensure that the views
of customer groups are appropriately reflected in plans for
implementation of these authorities.
SEC. 104. 5-YEAR PLANS.
The Bureau of Reclamation, the United States Army
Corps of Engineers, and the Administrators of the Federal
Power Marketing Administrations shall jointly develop,
and make available to the public, 5-year plans for the op-
eration, maintenance, and replacement of all hydroelectric
facilities managed by such agencies.
TITLE II—RATES
SEC. 201. ACCOUNTING AND COST RECOVERY.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, the Secretary of Energy shall implement sec-
tion 302 of the Department of Energy Organization Act
of 1977 (91 Stat. 578; 42 U.S.C. 7152) so as to ensure
that the Federal Power Marketing Administrations pro-
vide for the sale and disposition of Federal energy at rates
set in conformance with this section.
(b) PROCEDURES.—Not later than 6 months after
the date of enactment of this Act, the Secretary of Energy
shall promulgate rules containing each of the following:
(1) ACCOUNTING
PRINCIPLES
AND
REQUIRE-
MENTS.—Procedures to ensure that the Federal
Power Marketing Administrations utilize the same
accounting principles and requirements as are appli-
cable to public utilities pursuant to parts II and III
of the Federal Power Act (16 U.S.C. 792 and fol-
lowing) with respect to accounting for revenue, ex-
penses, investments, and depreciation.
(2) RATES.—Procedures for setting rates for
the sale and disposition of Federal energy which—
(A) use the procedures and accounts estab-
lished pursuant to paragraph (1);
(B) use the appropriate ratemaking stand-
ards and requirements generally applicable to
public utilities pursuant to part II of the Fed-
eral Power Act (16 U.S.C. 824 et seq.); and
(C) ultimately recover from Federal Power
Marketing Administration electric energy cus-
tomers all costs incurred by such Federal
Power Marketing Administration (or other Fed-
eral agency, where applicable) for the genera-
tion and marketing of Federal energy sold to
such customers.
(3) STRANDED COSTS.—The Secretary of En-
ergy may delay the effective date of the procedures
under paragraph (2) for not more than one year
until appropriate stranded costs mechanisms are de-
veloped.
(4) COMPLIANCE.—Procedures for the filing of
complaints with the Federal Energy Regulatory
Commission by interested persons seeking to ensure
compliance with the procedures of this section.
(4) ADMINISTRATIVE RECONCILIATION.—Proce-
dures to insure that the Bureau of Reclamation, the
United States Army Corps of Engineers, and the
Administrators of the Federal Power Marketing Ad-
ministrations maintain a consistent set of books and
records for purposes of repayment obligations.
(c) NEW RATES FOR SALE OF ENERGY.—Not later
than 1 year after the enactment of this Act, each Federal
Power Marketing Administration shall propose rates for
the sale and disposition of Federal energy using the proce-
dures established by the Secretary pursuant to this Act,
and, upon approval by the Federal Energy Regulatory
Commission, shall immediately thereafter apply such rates
to each new contract (and to each existing contract to the
maximum extent permitted by such contract) for the sale
or disposition of Federal energy by such Federal Power
Marketing Administration.
SEC. 202. APPROVAL OF FEDERAL ENERGY RATES.
(a) FLOOD CONTROL ACT OF 1944.—(1) The first
sentence of section 5 of the Flood Control Act of 1944
(58 Stat. 890; 16 U.S.C. 825s) is amended as follows:
(A) By inserting the following after the word
‘‘principles:’’ ‘‘and the provisions of the Federal
Power Marketing Act of 1997’’.
(B) By striking the words ‘‘confirmation and,’’
and inserting the following: ‘‘determination or’’.
(C) By striking ‘‘Secretary of Energy’’ at the
end of such sentence and inserting in lieu thereof
‘‘Federal Energy Regulatory Commission pursuant
to the provisions of the Federal Power Marketing
Act of 1997’’.
(2) The second sentence of such section 5 is amended
by striking ‘‘(upon the basis of the application of such rate
schedules to the capacity of the electric facilities of the
projects)’’ and by striking the period at the end thereof
and inserting the following: ‘‘and in conformance with the
provisions of the Federal Power Marketing Act of 1997.’’.
(b) DEPARTMENT
OF
ENERGY
ORGANIZATION
ACT.—Section 302 of the Department of Energy Organi-
zation Act (42 U.S.C. 7152(a)(1)) is amended by adding
the following new subsection after subsection (a):
‘‘(b) RATES.—The Federal Energy Regulatory Com-
mission shall have authority, consistent with the provisions
of the Federal Power Marketing Act of 1997 to—
‘‘(1) approve, reject, or revise rates for the sale
and disposition of electric energy by the Federal
Power Marketing Administrations; and
‘‘(2) determine rates, terms and conditions for
the transmission of Federal and non-Federal electric
energy by the Federal Power Marketing Administra-
tions.’’.
(c) PACIFIC NORTHWEST ELECTRIC POWER PLAN-
NING AND CONSERVATION ACT.—(1) Section 7(a) of the
Pacific Northwest Electric Power Planning and Conserva-
tion Act (16 U.S.C. 839e(a)(2)) is amended as follows:
(A) In the first sentence of paragraph (1) by
striking ‘‘and for the transmission of non-Federal
power’’ and in the second sentence of paragraph (1)
by striking ‘‘and transmission’’ and by striking
‘‘other costs and expenses’’ and inserting ‘‘other
costs and expenses (other than those properly alloca-
ble, as determined by the Federal Energy Regu-
latory Commission in accordance with generally ac-
cepted ratemaking principles)’’.
(B) In paragraph (2) by striking ‘‘confirmation
and’’ and inserting ‘‘determination or’’.
(C) By amending subparagraph (C) of para-
graph (2) to read as follows:
‘‘(C) are set in conformance with the Federal
Power Marketing Act of 1997.’’.
(D) By inserting the following at the end of
subsection (a):
‘‘(3) Rates, terms, and conditions for the trans-
mission of power by the Administrator shall be de-
termined by, and shall become effective only as per-
mitted or ordered by, the Federal Energy Regu-
latory Commission pursuant to the Federal Power
Act.’’.
(2) The first sentence of section 7(k) of the Pacific
Northwest Electric Power Planning and Conservation Act
(16 U.S.C. 839e(k)) is amended by striking the period and
adding the following at the end thereof: ‘‘, and in accord-
ance with the Federal Power Marketing Act of 1997’’.
(3) Section 7(k) of such Act is amended by striking
all after ‘‘approval thereof by the Commission’’ and insert-
ing ‘‘in accordance with the Federal Power Marketing Act
of 1997.’’.
(d) BONNEVILLE PROJECT ACT.—Section 7 of the
Bonneville Project Act, as amended (16 U.S.C. 832(f)),
is amended by striking ‘‘(upon the basis of the application
of such rate schedules to the capacity of the electric facili-
ties of Bonneville project)’’.
(e) FEDERAL COLUMBIA RIVER TRANSMISSION SYS-
TEM ACT.—Section 9 of the Federal Columbia River
Transmission System Act (16 U.S.C. 838g) is amended
as follows:
(1) By striking ‘‘confirmation and’’ in each
place it appears and inserting ‘‘determination or’’.
(2) By striking ‘‘Secretary of Energy’’ in each
place it appears, and inserting ‘‘Federal Energy
Regulatory Commission’’.
(3) By striking ‘‘and’’ at the end of paragraph
(2).
(4) By striking the period at the end of the sec-
tion and adding the following: ‘‘, and (4) in accord-
ance with the provisions of the Federal Power Mar-
keting Act of 1997.’’.
(f) APPROVAL PROCESS.—Notwithstanding any other
provision of law, the Federal Energy Regulatory Commis-
sion shall have authority to approve, reject, revise, or de-
termine rates for the sale or disposition of electric energy
proposed by the Federal Power Marketing Administra-
tions. The Commission’s authority shall include, but shall
not be limited to, assuring that rates of the Federal Power
Marketing Administrations are in accordance with the
provisions of this Act. Notwithstanding any other provi-
sion of law, the Federal Energy Regulatory Commission
may review de novo the factual bases for rates proposed
by the Federal Power Marketing Administrations. In any
proceeding before the Federal Energy Regulatory Com-
mission regarding the rates, terms, or conditions for the
transmission, sale, or disposition of electric energy by a
Federal Power Marketing Administration, the officers and
employees of the Federal Power Marketing Administration
shall comply with the ex parte rules of the Federal Energy
Regulatory Commission as applicable to public utilities.
(g) RULES AND REGULATIONS.—The Federal En-
ergy Regulatory Commission shall promulgate rules and
regulations to implement the requirements of this section
not later than one year after the date of enactment of this
Act.
TITLE III—TRANSMISSION
SEC. 301. RATES FOR FEDERAL TRANSMISSION SERVICES.
Section 201(e) of the Federal Power Act (16 U.S.C.
824(e)) is amended by inserting ‘‘(1) after ‘‘(e)’’, and by
adding the following new paragraph at the end thereof:
‘‘(2) Notwithstanding any other provision of law,
each Federal Power Marketing Administration, or any
corporation or association which is wholly owned, directly
or indirectly, by any Federal Power Marketing Adminis-
tration shall be considered a public utility solely for the
purposes of part II and part III of this Act with respect
to determining, fixing and otherwise regulating rates,
terms and conditions for transmission of electric energy.
The recovery of the costs of Federal transmission facilities
shall be equitably allocated (in accordance with generally
accepted ratemaking principles for public utilities) to Fed-
eral and non-Federal power utilizing such transmission fa-
cilities. Nothing in this section shall expand the authority
of any such entities with respect to transmission of electric
energy.’’.
SEC. 302. AMENDMENT TO SECTION 212 OF THE FEDERAL
POWER ACT.
Section 212 of the Federal Power Act is amended by
striking subsection (i).
TITLE IV—ENFORCEMENT
SEC. 401. REVIEW AND ENFORCEMENT.
Notwithstanding any other provision of law, each af-
fected person or entity shall have the right to bring an
action to enforce the requirements of this Act and Acts
amended by this Act with respect to any matter addressed
in this Act or by amendment made in this Act in the rel-
evant United States district court.
Æ