In the Senate of the United States,
April 25, 2002.
Resolved, That the bill from the House of Representa-
tives (H.R. 4) entitled ‘‘An Act to enhance energy conserva-
tion, research and development and to provide for security
and diversity in the energy supply for the American people,
and for other purposes.’’, do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Energy Policy Act of
2002’’.
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SEC. 2. TABLE OF CONTENTS.
Sec. 1. Short title.
Sec. 2. Table of contents.
DIVISION A—RELIABLE AND DIVERSE POWER GENERATION AND
TRANSMISSION
TITLE I—REGIONAL COORDINATION
Sec. 101. Policy on regional coordination.
Sec. 102. Federal support for regional coordination.
TITLE II—ELECTRICITY
Subtitle A—Amendments to the Federal Power Act
Sec. 201. Definitions.
Sec. 202. Electric utility mergers.
Sec. 203. Market-based rates.
Sec. 204. Refund effective date.
Sec. 205. Open access transmission by certain utilities.
Sec. 206. Electric reliability standards.
Sec. 207. Market transparency rules.
Sec. 208. Access to transmission by intermittent generators.
Sec. 209. Enforcement.
Sec. 210. Electric power transmission systems.
Subtitle B—Amendments to the Public Utility Holding Company Act
Sec. 221. Short title.
Sec. 222. Definitions.
Sec. 223. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 224. Federal access to books and records.
Sec. 225. State access to books and records.
Sec. 226. Exemption authority.
Sec. 227. Affiliate transactions.
Sec. 228. Applicability.
Sec. 229. Effect on other regulations.
Sec. 230. Enforcement.
Sec. 231. Savings provisions.
Sec. 232. Implementation.
Sec. 233. Transfer of resources.
Sec. 234. Inter-agency review of competition in the wholesale and retail markets
for electric energy.
Sec. 235. GAO study on implementation.
Sec. 236. Effective date.
Sec. 237. Authorization of appropriations.
Sec. 238. Conforming amendments to the Federal Power Act.
Subtitle C—Amendments to the Public Utility Regulatory Policies Act of 1978
Sec. 241. Real-time pricing and time-of-use metering standards.
Sec. 242. Adoption of additional standards.
Sec. 243. Technical assistance.
Sec. 244. Cogeneration and small power production purchase and sale require-
ments.
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Sec. 245. Net metering.
Subtitle D—Consumer Protections
Sec. 251. Information disclosure.
Sec. 252. Consumer privacy.
Sec. 253. Office of Consumer Advocacy.
Sec. 254. Unfair trade practices.
Sec. 255. Applicable procedures.
Sec. 256. Federal Trade Commission enforcement.
Sec. 257. State authority.
Sec. 258. Application of subtitle.
Sec. 259. Definitions.
Subtitle E—Renewable Energy and Rural Construction Grants
Sec. 261. Renewable energy production incentive.
Sec. 262. Assessment of renewable energy resources.
Sec. 263. Federal purchase requirement.
Sec. 264. Renewable portfolio standard.
Sec. 265. Renewable energy on Federal land.
Subtitle F—General Provisions
Sec. 271. Change 3 cents to 1.5 cents.
Sec. 272. Bonneville Power Administration bonds.
TITLE III—HYDROELECTRIC RELICENSING
Sec. 301. Alternative conditions and fishways.
TITLE IV—INDIAN ENERGY
Sec. 401. Comprehensive Indian energy program.
Sec. 402. Office of Indian Energy Policy and Programs.
Sec. 403. Conforming amendments.
Sec. 404. Siting energy facilities on tribal lands.
Sec. 405. Indian Mineral Development Act review.
Sec. 406. Renewable energy study.
Sec. 407. Federal Power Marketing Administrations.
Sec. 408. Feasibility study of combined wind and hydropower demonstration
project.
TITLE V—NUCLEAR POWER
Subtitle A—Price-Anderson Act Reauthorization
Sec. 501. Short title.
Sec. 502. Extension of indemnification authority.
Sec. 503. Department of Energy liability limit.
Sec. 504. Incidents outside the United States.
Sec. 505. Reports.
Sec. 506. Inflation adjustment.
Sec. 507. Civil penalties.
Sec. 508. Treatment of modular reactors.
Sec. 509. Effective date.
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Subtitle B—Miscellaneous Provisions
Sec. 511. Uranium sales.
Sec. 512. Reauthorization of thorium reimbursement.
Sec. 513. Fast Flux Test Facility.
Sec. 514. Nuclear Power 2010.
Sec. 515. Office of Spent Nuclear Fuel Research.
Sec. 516. Decommissioning pilot program.
Subtitle C—Growth of Nuclear Energy
Sec. 521. Combined license periods.
Subtitle D—NRC Regulatory Reform
Sec. 531. Antitrust review.
Sec. 532. Decommissioning.
Subtitle E—NRC Personnel Crisis
Sec. 541. Elimination of pension offset.
Sec. 542. NRC training program.
DIVISION B—DOMESTIC OIL AND GAS PRODUCTION AND
TRANSPORTATION
TITLE VI—OIL AND GAS PRODUCTION
Sec. 601. Permanent authority to operate the Strategic Petroleum Reserve.
Sec. 602. Federal onshore leasing programs for oil and gas.
Sec. 603. Oil and gas lease acreage limitations.
Sec. 604. Orphaned and abandoned wells on Federal land.
Sec. 605. Orphaned and abandoned oil and gas well program.
Sec. 606. Offshore development.
Sec. 607. Coalbed methane study.
Sec. 608. Fiscal policies to maximize recovery of domestic oil and gas resources.
Sec. 609. Strategic Petroleum Reserve.
Sec. 610. Hydraulic fracturing.
Sec. 611. Authorization of appropriations.
Sec. 612. Preservation of oil and gas resource data.
Sec. 613. Resolution of Federal resource development conflicts in the Powder
River Basin.
TITLE VII—NATURAL GAS PIPELINES
Subtitle A—Alaska Natural Gas Pipeline
Sec. 701. Short title.
Sec. 702. Findings.
Sec. 703. Purposes.
Sec. 704. Issuance of certificate of public convenience and necessity.
Sec. 705. Environmental reviews.
Sec. 706. Pipeline expansion.
Sec. 707. Federal Coordinator.
Sec. 708. Judicial review.
Sec. 709. State jurisdiction over in-State delivery of natural gas.
Sec. 710. Loan guarantee.
Sec. 711. Study of alternative means of construction.
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Sec. 712. Clarification of ANGTA status and authorities.
Sec. 713. Definitions.
Sec. 714. Sense of the Senate.
Sec. 715. Alaskan pipeline construction training program.
Subtitle B—Operating Pipelines
Sec. 721. Environmental review and permitting of natural gas pipeline projects.
Subtitle C—Pipeline Safety
PART I—SHORT TITLE; AMENDMENT OF TITLE 49
Sec. 741. Short title; amendment of title 49, United States Code.
PART II—PIPELINE SAFETY IMPROVEMENT ACT OF 2002
Sec. 761. Implementation of Inspector General recommendations.
Sec. 762. NTSB safety recommendations.
Sec. 763. Qualifications of pipeline personnel.
Sec. 764. Pipeline integrity inspection program.
Sec. 765. Enforcement.
Sec. 766. Public education, emergency preparedness, and community right-to-
know.
Sec. 767. Penalties.
Sec. 768. State oversight role.
Sec. 769. Improved data and data availability.
Sec. 770. Research and development.
Sec. 771. Pipeline integrity technical advisory committee.
Sec. 772. Authorization of appropriations.
Sec. 773. Operator assistance in investigations.
Sec. 774. Protection of employees providing pipeline safety information.
Sec. 775. State pipeline safety advisory committees.
Sec. 776. Fines and penalties.
Sec. 777. Study of rights-of-way.
Sec. 778. Study of natural gas reserve.
Sec. 779. Study and report on natural gas pipeline and storage facilities in New
England.
PART III—PIPELINE SECURITY SENSITIVE INFORMATION
Sec. 781. Meeting community right-to-know without security risks.
Sec. 782. Technical assistance for security of pipeline facilities.
Sec. 783. Criminal penalties for damaging or destroying a facility.
DIVISION C—DIVERSIFYING ENERGY DEMAND AND IMPROVING
EFFICIENCY
TITLE VIII—FUELS AND VEHICLES
Subtitle A—CAFE Standards, Alternative Fuels, and Advanced Technology
Sec. 801. Increased fuel economy standards.
Sec. 802. Expedited procedures for congressional increase in fuel economy stand-
ards.
Sec. 803. Revised considerations for decisions on maximum feasible average fuel
economy.
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Sec. 804. Extension of maximum fuel economy increase for alternative fueled ve-
hicles.
Sec. 805. Procurement of alternative fueled and hybrid light duty trucks.
Sec. 806. Use of alternative fuels.
Sec. 807. Hybrid electric and fuel cell vehicles.
Sec. 808. Diesel fueled vehicles.
Sec. 809. Fuel cell demonstration.
Sec. 810. Bus replacement.
Sec. 811. Average fuel economy standards for pickup trucks.
Sec. 812. Exception to HOV passenger requirements for alternative fuel vehicles.
Sec. 813. Data collection.
Sec. 814. Green school bus pilot program.
Sec. 815. Fuel cell bus development and demonstration program.
Sec. 816. Authorization of appropriations.
Sec. 817. Temporary biodiesel credit expansion.
Sec. 818. Neighborhood electric vehicles.
Sec. 819. Credit for hybrid vehicles, dedicated alternative fuel vehicles, and infra-
structure.
Sec. 820. Renewable content of motor vehicle fuel.
Sec. 820A. Federal agency ethanol-blended gasoline and biodiesel purchasing re-
quirement.
Sec. 820B. Commercial byproducts from municipal solid waste loan guarantee
program.
Subtitle B—Additional Fuel Efficiency Measures
Sec. 821. Fuel efficiency of the Federal fleet of automobiles.
Sec. 822. Idling reduction systems in heavy duty vehicles.
Sec. 823. Conserve By Bicycling program.
Sec. 824. Fuel cell vehicle program.
Subtitle C—Federal Reformulated Fuels
Sec. 831. Short title.
Sec. 832. Leaking underground storage tanks.
Sec. 833. Authority for water quality protection from fuels.
Sec. 834. Elimination of oxygen content requirement for reformulated gasoline.
Sec. 835. Public health and environmental impacts of fuels and fuel additives.
Sec. 836. Analyses of motor vehicle fuel changes.
Sec. 837. Additional opt-in areas under reformulated gasoline program.
Sec. 838. Federal enforcement of State fuels requirements.
Sec. 839. Fuel system requirements harmonization study.
Sec. 840. Review of Federal procurement initiatives relating to use of recycled
products and fleet and transportation efficiency.
TITLE IX—ENERGY EFFICIENCY AND ASSISTANCE TO LOW INCOME
CONSUMERS
Subtitle A—Low Income Assistance and State Energy Programs
Sec. 901. Increased funding for LIHEAP, weatherization assistance, and State
energy grants.
Sec. 902. State energy programs.
Sec. 903. Energy efficient schools.
Sec. 904. Low income community energy efficiency pilot program.
Sec. 905. Energy efficient appliance rebate programs.
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Subtitle B—Federal Energy Efficiency
Sec. 911. Energy management requirements.
Sec. 912. Energy use measurement and accountability.
Sec. 913. Federal building performance standards.
Sec. 914. Procurement of energy efficient products.
Sec. 915. Repeal of energy savings performance contract sunset.
Sec. 916. Energy savings performance contract definitions.
Sec. 917. Review of energy savings performance contract program.
Sec. 918. Federal Energy Bank.
Sec. 919. Energy and water saving measures in congressional buildings.
Sec. 920. Increased use of recovered material in federally funded projects involv-
ing procurement of cement or concrete.
Subtitle C—Industrial Efficiency and Consumer Products
Sec. 921. Voluntary commitments to reduce industrial energy intensity.
Sec. 922. Authority to set standards for commercial products.
Sec. 923. Additional definitions.
Sec. 924. Additional test procedures.
Sec. 925. Energy labeling.
Sec. 926. Energy Star Program.
Sec. 927. Energy conservation standards for central air-conditioners and heat
pumps.
Sec. 928. Energy conservation standards for additional consumer and commercial
products.
Sec. 929. Consumer education on energy efficiency benefits of air-conditioning,
heating, and ventilation maintenance.
Sec. 930. Study of energy efficiency standards.
Subtitle D—Housing Efficiency
Sec. 931. Capacity building for energy efficient, affordable housing.
Sec. 932. Increase of CDBG public services cap for energy conservation and effi-
ciency activities.
Sec. 933. FHA mortgage insurance incentives for energy efficient housing.
Sec. 934. Public housing capital fund.
Sec. 935. Grants for energy-conserving improvements for assisted housing.
Sec. 936. North American Development Bank.
Sec. 937. Capital fund.
Sec. 938. Energy-efficient appliances.
Sec. 939. Energy efficiency standards.
Sec. 940. Energy strategy for HUD.
Subtitle E—Rural and Remote Communities
Sec. 941. Short title.
Sec. 942. Findings and purpose.
Sec. 943. Definitions.
Sec. 944. Authorization of appropriations.
Sec. 945. Statement of activities and review.
Sec. 946. Eligible activities.
Sec. 947. Allocation and distribution of funds.
Sec. 948. Rural and remote community electrification grants.
Sec. 949. Additional authorization of appropriations.
Sec. 950. Rural recovery community development block grants.
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DIVISION D—INTEGRATION OF ENERGY POLICY AND CLIMATE
CHANGE POLICY
TITLE X—NATIONAL CLIMATE CHANGE POLICY
Subtitle A—Sense of Congress
Sec. 1001. Sense of Congress on climate change.
Subtitle B—Climate Change Strategy
Sec. 1011. Short title.
Sec. 1012. Definitions.
Sec. 1013. National climate change strategy.
Sec. 1014. Office of National Climate Change Policy.
Sec. 1015. Office of Climate Change Technology.
Sec. 1016. Additional offices and activities.
Subtitle C—Science and Technology Policy
Sec. 1021. Global climate change in the Office of Science and Technology Policy.
Sec. 1022. Director of Office of Science and Technology Policy Functions.
Subtitle D—Miscellaneous Provisions
Sec. 1031. Additional information for regulatory review.
Sec. 1032. Greenhouse gas emissions from Federal facilities.
TITLE XI—NATIONAL GREENHOUSE GAS DATABASE
Sec. 1101. Purpose.
Sec. 1102. Definitions.
Sec. 1103. Establishment of memorandum of agreement.
Sec. 1104. National Greenhouse Gas Database.
Sec. 1105. Greenhouse gas reduction reporting.
Sec. 1106. Measurement and verification.
Sec. 1107. Independent reviews.
Sec. 1108. Review of participation.
Sec. 1109. Enforcement.
Sec. 1110. Report on statutory changes and harmonization.
Sec. 1111. Authorization of appropriations.
DIVISION E—ENHANCING RESEARCH, DEVELOPMENT, AND
TRAINING
TITLE XII—ENERGY RESEARCH AND DEVELOPMENT PROGRAMS
Sec. 1201. Short title.
Sec. 1202. Findings.
Sec. 1203. Definitions.
Sec. 1204. Construction with other laws.
Subtitle A—Energy Efficiency
Sec. 1211. Enhanced energy efficiency research and development.
Sec. 1212. Energy efficiency science initiative.
Sec. 1213. Next generation lighting initiative.
Sec. 1214. Railroad efficiency.
Sec. 1215. High power density industry program.
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Sec. 1216. Research regarding precious metal catalysis.
Subtitle B—Renewable Energy
Sec. 1221. Enhanced renewable energy research and development.
Sec. 1222. Bioenergy programs.
Sec. 1223. Hydrogen research and development.
Subtitle C—Fossil Energy
Sec. 1231. Enhanced fossil energy research and development.
Sec. 1232. Power plant improvement initiative.
Sec. 1233. Research and development for advanced safe and efficient coal mining
technologies.
Sec. 1234. Ultra-deepwater and unconventional resource exploration and produc-
tion technologies.
Sec. 1235. Research and development for new natural gas transportation tech-
nologies.
Sec. 1236. Authorization of appropriations for Office of Arctic Energy.
Sec. 1237. Clean coal technology loan.
Subtitle D—Nuclear Energy
Sec. 1241. Enhanced nuclear energy research and development.
Sec. 1242. University nuclear science and engineering support.
Sec. 1243. Nuclear energy research initiative.
Sec. 1244. Nuclear energy plant optimization program.
Sec. 1245. Nuclear energy technology development program.
Subtitle E—Fundamental Energy Science
Sec. 1251. Enhanced programs in fundamental energy science.
Sec. 1252. Nanoscale science and engineering research.
Sec. 1253. Advanced scientific computing for energy missions.
Sec. 1254. Fusion energy sciences program and planning.
Subtitle F—Energy, Safety, and Environmental Protection
Sec. 1261. Critical energy infrastructure protection research and development.
Sec. 1262. Research and demonstration for remediation of groundwater from en-
ergy activities.
TITLE XIII—CLIMATE CHANGE SCIENCE AND TECHNOLOGY
Subtitle A—Department of Energy Programs
Sec. 1301. Department of Energy global change research.
Sec. 1302. Amendments to the Federal Nonnuclear Research and Development Act
of 1974.
Subtitle B—Department of Agriculture Programs
Sec. 1311. Carbon sequestration basic and applied research.
Sec. 1312. Carbon sequestration demonstration projects and outreach.
Sec. 1313. Carbon storage and sequestration accounting research.
Subtitle C—International Energy Technology Transfer
Sec. 1321. Clean energy technology exports program.
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Sec. 1322. International energy technology deployment program.
Subtitle D—Climate Change Science and Information
PART I—AMENDMENTS TO THE GLOBAL CHANGE RESEARCH ACT OF 1990
Sec. 1331. Amendment of Global Change Research Act of 1990.
Sec. 1332. Changes in definitions.
Sec. 1333. Change in committee name and structure.
Sec. 1334. Change in national global change research plan.
Sec. 1335. Integrated Program Office.
Sec. 1336. Research grants.
Sec. 1337. Evaluation of information.
PART II—NATIONAL CLIMATE SERVICES AND MONITORING
Sec. 1341. Amendment of National Climate Program Act.
Sec. 1342. Changes in findings.
Sec. 1343. Tools for regional planning.
Sec. 1344. Authorization of appropriations.
Sec. 1345. National Climate Service Plan.
Sec. 1346. International Pacific research and cooperation.
Sec. 1347. Reporting on trends.
Sec. 1348. Arctic research and policy.
Sec. 1349. Abrupt climate change research.
PART III—OCEAN AND COASTAL OBSERVING SYSTEM
Sec. 1351. Ocean and coastal observing system.
Sec. 1352. Authorization of appropriations.
Subtitle E—Climate Change Technology
Sec. 1361. NIST greenhouse gas functions.
Sec. 1362. Development of new measurement technologies.
Sec. 1363. Enhanced environmental measurements and standards.
Sec. 1364. Technology development and diffusion.
Sec. 1365. Authorization of appropriations.
Subtitle F—Climate Adaptation and Hazards Prevention
PART I—ASSESSMENT AND ADAPTATION
Sec. 1371. Regional climate assessment and adaptation program.
Sec. 1372. Coastal vulnerability and adaptation.
Sec. 1373. Arctic research center.
PART II—FORECASTING AND PLANNING PILOT PROGRAMS
Sec. 1381. Remote sensing pilot projects.
Sec. 1382. Database establishment.
Sec. 1383. Air quality research, forecasts and warnings.
Sec. 1384. Definitions.
Sec. 1385. Authorization of appropriations.
TITLE XIV—MANAGEMENT OF DOE SCIENCE AND TECHNOLOGY
PROGRAMS
Sec. 1401. Definitions.
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Sec. 1402. Availability of funds.
Sec. 1403. Cost sharing.
Sec. 1404. Merit review of proposals.
Sec. 1405. External technical review of departmental programs.
Sec. 1406. Improved coordination and management of civilian science and tech-
nology programs.
Sec. 1407. Improved coordination of technology transfer activities.
Sec. 1408. Technology infrastructure program.
Sec. 1409. Small business advocacy and assistance.
Sec. 1410. Other transactions.
Sec. 1411. Mobility of scientific and technical personnel.
Sec. 1412. National Academy of Sciences report.
Sec. 1413. Report on technology readiness and barriers to technology transfer.
Sec. 1414. United States-Mexico energy technology cooperation.
TITLE XV—PERSONNEL AND TRAINING
Sec. 1501. Workforce trends and traineeship grants.
Sec. 1502. Postdoctoral and senior research fellowships in energy research.
Sec. 1503. Training guidelines for electric energy industry personnel.
Sec. 1504. National Center on Energy Management and Building Technologies.
Sec. 1505. Improved access to energy-related scientific and technical careers.
Sec. 1506. National power plant operations technology and education center.
Sec. 1507. Federal mine inspectors.
DIVISION F—TECHNOLOGY ASSESSMENT AND STUDIES
TITLE XVI—TECHNOLOGY ASSESSMENT
Sec. 1601. National Science and Technology Assessment Service.
TITLE XVII—STUDIES
Sec. 1701. Regulatory reviews.
Sec. 1702. Assessment of dependence of State of Hawaii on oil.
Sec. 1703. Study of siting an electric transmission system on Amtrak right-of-
way.
Sec. 1704. Updating of insular area renewable energy and energy efficiency
plans.
Sec. 1705. Consumer Energy Commission.
Sec. 1706. Study of natural gas and other energy transmission infrastructure
across the great lakes.
Sec. 1707. National Academy of Sciences study of procedures for selection and as-
sessment of certain routes for shipment of spent nuclear fuel
from research nuclear reactors.
Sec. 1708. Report on energy savings and water use.
Sec. 1709. Report on research on hydrogen production and use.
DIVISION G—ENERGY INFRASTRUCTURE SECURITY
TITLE XVIII—CRITICAL ENERGY INFRASTRUCTURE
Subtitle A—Department of Energy Programs
Sec. 1801. Definitions.
Sec. 1802. Role of the Department of Energy.
Sec. 1803. Critical energy infrastructure programs.
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Sec. 1804. Advisory Committee on Energy Infrastructure Security.
Sec. 1805. Best practices and standards for energy infrastructure security.
Subtitle B—Department of the Interior Programs
Sec. 1811. Outer Continental Shelf energy infrastructure security.
DIVISION H—ENERGY TAX INCENTIVES
Sec. 1900. Short title; etc.
TITLE XIX—EXTENSION AND MODIFICATION OF RENEWABLE
ELECTRICITY PRODUCTION TAX CREDIT
Sec. 1901. Three-year extension of credit for producing electricity from wind and
poultry waste.
Sec. 1902. Credit for electricity produced from biomass.
Sec. 1903. Credit for electricity produced from swine and bovine waste nutrients,
geothermal energy, and solar energy.
Sec. 1904. Treatment of persons not able to use entire credit.
Sec. 1905. Credit for electricity produced from small irrigation power.
Sec. 1906. Credit for electricity produced from municipal biosolids and recycled
sludge.
TITLE XX—ALTERNATIVE MOTOR VEHICLES AND FUELS
INCENTIVES
Sec. 2001. Alternative motor vehicle credit.
Sec. 2002. Modification of credit for qualified electric vehicles.
Sec. 2003. Credit for installation of alternative fueling stations.
Sec. 2004. Credit for retail sale of alternative fuels as motor vehicle fuel.
Sec. 2005. Small ethanol producer credit.
Sec. 2006. All alcohol fuels taxes transferred to Highway Trust Fund.
Sec. 2007. Increased flexibility in alcohol fuels tax credit.
Sec. 2008. Incentives for biodiesel.
Sec. 2009. Credit for taxpayers owning commercial power takeoff vehicles.
Sec. 2010. Modifications to the incentives for alternative vehicles and fuels.
TITLE XXI—CONSERVATION AND ENERGY EFFICIENCY PROVISIONS
Sec. 2101. Credit for construction of new energy efficient home.
Sec. 2102. Credit for energy efficient appliances.
Sec. 2103. Credit for residential energy efficient property.
Sec. 2104. Credit for business installation of qualified fuel cells and stationary
microturbine power plants.
Sec. 2105. Energy efficient commercial buildings deduction.
Sec. 2106. Allowance of deduction for qualified new or retrofitted energy manage-
ment devices.
Sec. 2107. Three-year applicable recovery period for depreciation of qualified en-
ergy management devices.
Sec. 2108. Energy credit for combined heat and power system property.
Sec. 2109. Credit for energy efficiency improvements to existing homes.
Sec. 2110. Allowance of deduction for qualified new or retrofitted water sub-
metering devices.
Sec. 2111. Three-year applicable recovery period for depreciation of qualified
water submetering devices.
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TITLE XXII—CLEAN COAL INCENTIVES
Subtitle A—Credit for Emission Reductions and Efficiency Improvements in
Existing Coal-based Electricity Generation Facilities
Sec. 2201. Credit for production from a qualifying clean coal technology unit.
Subtitle B—Incentives for Early Commercial Applications of Advanced Clean
Coal Technologies
Sec. 2211. Credit for investment in qualifying advanced clean coal technology.
Sec. 2212. Credit for production from a qualifying advanced clean coal tech-
nology unit.
Subtitle C—Treatment of Persons Not Able To Use Entire Credit
Sec. 2221. Treatment of persons not able to use entire credit.
TITLE XXIII—OIL AND GAS PROVISIONS
Sec. 2301. Oil and gas from marginal wells.
Sec. 2302. Natural gas gathering lines treated as 7-year property.
Sec. 2303. Expensing of capital costs incurred in complying with environmental
protection agency sulfur regulations.
Sec. 2304. Environmental tax credit.
Sec. 2305. Determination of small refiner exception to oil depletion deduction.
Sec. 2306. Marginal production income limit extension.
Sec. 2307. Amortization of geological and geophysical expenditures.
Sec. 2308. Amortization of delay rental payments.
Sec. 2309. Study of coal bed methane.
Sec. 2310. Extension and modification of credit for producing fuel from a non-
conventional source.
Sec. 2311. Natural gas distribution lines treated as 15-year property.
TITLE XXIV—ELECTRIC UTILITY RESTRUCTURING PROVISIONS
Sec. 2401. Ongoing study and reports regarding tax issues resulting from future
restructuring decisions.
Sec. 2402. Modifications to special rules for nuclear decommissioning costs.
Sec. 2403. Treatment of certain income of cooperatives.
Sec. 2404. Sales or dispositions to implement Federal Energy Regulatory Com-
mission or State electric restructuring policy.
Sec. 2405. Application of temporary regulations to certain output contracts.
Sec. 2406. Treatment of certain development income of cooperatives.
TITLE XXV—ADDITIONAL PROVISIONS
Sec. 2501. Extension of accelerated depreciation and wage credit benefits on In-
dian reservations.
Sec. 2502. Study of effectiveness of certain provisions by GAO.
Sec. 2503. Credit for production of Alaska natural gas.
Sec. 2504. Sale of gasoline and diesel fuel at duty-free sales enterprises.
Sec. 2505. Treatment of dairy property.
Sec. 2506. Clarification of excise tax exemptions for agricultural aerial applica-
tors.
Sec. 2507. Modification of rural airport definition.
Sec. 2508. Exemption from ticket taxes for transportation provided by seaplanes.
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DIVISION I—IRAQ OIL IMPORT RESTRICTION
TITLE XXVI—IRAQ OIL IMPORT RESTRICTION
Sec. 2601. Short title and findings.
Sec. 2602. Prohibition on Iraqi-origin petroleum imports.
Sec. 2603. Termination/Presidential certification.
Sec. 2604. Humanitarian interests.
Sec. 2605. Definitions.
Sec. 2606. Effective date.
DIVISION J—MISCELLANEOUS
TITLE XXVII—MISCELLANEOUS PROVISION
Sec. 2701. Fair treatment of Presidential judicial nominees.
DIVISION A—RELIABLE AND DI-
VERSE POWER GENERATION
AND TRANSMISSION
TITLE I—REGIONAL
COORDINATION
SEC. 101. POLICY ON REGIONAL COORDINATION.
(a) STATEMENT OF POLICY.—It is the policy of the
Federal Government to encourage States to coordinate, on
a regional basis, State energy policies to provide reliable
and affordable energy services to the public while mini-
mizing the impact of providing energy services on commu-
nities and the environment.
(b) DEFINITION OF ENERGY SERVICES.—For purposes
of this section, the term ‘‘energy services’’ means—
(1) the generation or transmission of electric en-
ergy,
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(2) the transportation, storage, and distribution
of crude oil, residual fuel oil, refined petroleum prod-
uct, or natural gas, or
(3) the reduction in load through increased effi-
ciency, conservation, or load control measures.
SEC. 102. FEDERAL SUPPORT FOR REGIONAL COORDINA-
TION.
(a) TECHNICAL ASSISTANCE.—The Secretary of En-
ergy shall provide technical assistance to States and re-
gional organizations formed by two or more States to assist
them in coordinating their energy policies on a regional
basis. Such technical assistance may include assistance
in—
(1) identifying the areas with the greatest energy
resource potential, and assessing future supply avail-
ability and demand requirements,
(2) planning, coordinating, and siting addi-
tional energy infrastructure, including generating fa-
cilities, electric transmission facilities, pipelines, re-
fineries, and distributed generation facilities to maxi-
mize the efficiency of energy resources and infrastruc-
ture and meet regional needs with the minimum ad-
verse impacts on the environment,
(3) identifying and resolving problems in dis-
tribution networks,
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(4) developing plans to respond to surge demand
or emergency needs, and
(5) developing renewable energy, energy effi-
ciency, conservation, and load control programs.
(b) ANNUAL CONFERENCE ON REGIONAL ENERGY CO-
ORDINATION.—
(1) ANNUAL
CONFERENCE.—The Secretary of
Energy shall convene an annual conference to pro-
mote regional coordination on energy policy and in-
frastructure issues.
(2) PARTICIPATION.—The Secretary of Energy
shall invite appropriate representatives of Federal,
State, and regional energy organizations, and other
interested parties.
(3) STATE
AND
FEDERAL
AGENCY
COOPERA-
TION.—The Secretary of Energy shall consult and co-
operate with State and regional energy organizations,
the Secretary of the Interior, the Secretary of Agri-
culture, the Secretary of Commerce, the Secretary of
the Treasury, the Chairman of the Federal Energy
Regulatory Commission, the Administrator of the En-
vironmental Protection Agency, and the Chairman of
the Council on Environmental Quality in the plan-
ning and conduct of the conference.
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(4) AGENDA.—The Secretary of Energy, in con-
sultation with the officials identified in paragraph
(3) and participants identified in paragraph (2),
shall establish an agenda for each conference that pro-
motes regional coordination on energy policy and in-
frastructure issues.
(5) RECOMMENDATIONS.—Not later than 60 days
after the conclusion of each annual conference, the
Secretary of Energy shall report to the President and
the Congress recommendations arising out of the con-
ference that may improve—
(A) regional coordination on energy policy
and infrastructure issues, and
(B) Federal support for regional coordina-
tion.
TITLE II—ELECTRICITY
Subtitle A—Amendments to the
Federal Power Act
SEC. 201. DEFINITIONS.
(a) DEFINITION
OF
ELECTRIC
UTILITY.—Section
3(22) of the Federal Power Act (16 U.S.C. 796(22)) is
amended to read as follows:
‘‘(22) ‘electric utility’ means any person or Fed-
eral or State agency (including any municipality)
that sells electric energy; such term includes the Ten-
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nessee Valley Authority and each Federal power mar-
keting agency.’’.
(b) DEFINITION OF TRANSMITTING UTILITY.—Section
3(23) of the Federal Power Act (16 U.S.C. 796(23)) is
amended to read as follows:
‘‘(23) TRANSMITTING UTILITY.—The term ‘trans-
mitting utility’ means an entity (including any enti-
ty described in section 201(f)) that owns or operates
facilities used for the transmission of electric energy
in—
‘‘(A) interstate commerce; or
‘‘(B) for the sale of electric energy at whole-
sale.’’.
SEC. 202. ELECTRIC UTILITY MERGERS.
Section 203(a) of the Federal Power Act (16 U.S.C.
824b) is amended to read as follows:
‘‘(a)(1) No public utility shall, without first having se-
cured an order of the Commission authorizing it to do so—
‘‘(A) sell, lease, or otherwise dispose of the whole
of its facilities subject to the jurisdiction of the Com-
mission, or any part thereof of a value in excess of
$10,000,000,
‘‘(B) merge or consolidate, directly or indirectly,
such facilities or any part thereof with the facilities
of any other person, by any means whatsoever,
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‘‘(C) purchase, acquire, or take any security of
any other public utility, or
‘‘(D) purchase, lease, or otherwise acquire exist-
ing facilities for the generation of electric energy un-
less such facilities will be used exclusively for the sale
of electric energy at retail.
‘‘(2) No holding company in a holding company sys-
tem that includes a transmitting utility or an electric util-
ity company shall purchase, acquire, or take any security
of, or, by any means whatsoever, directly or indirectly,
merge or consolidate with a transmitting utility, an electric
utility company, a gas utility company, or a holding com-
pany in a holding company system that includes a trans-
mitting utility, an electric utility company, or a gas utility
company, without first having secured an order of the Com-
mission authorizing it to do so.
‘‘(3) Upon application for such approval the Commis-
sion shall give reasonable notice in writing to the Governor
and State commission of each of the States in which the
physical property affected, or any part thereof, is situated,
and to such other persons as it may deem advisable.
‘‘(4) After notice and opportunity for hearing, the
Commission shall approve the proposed disposition, consoli-
dation, acquisition, or control, if it finds that the proposed
transaction—
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‘‘(A) will be consistent with the public interest;
‘‘(B) will not adversely affect the interests of con-
sumers of electric energy of any public utility that is
a party to the transaction or is an associate company
of any party to the transaction;
‘‘(C) will not impair the ability of the Commis-
sion or any State commission having jurisdiction
over any public utility that is a party to the trans-
action or an associate company of any party to the
transaction to protect the interests of consumers or the
public; and
‘‘(D) will not lead to cross-subsidization of asso-
ciate companies or encumber any utility assets for the
benefit of an associate company.
‘‘(5) The Commission shall, by rule, adopt procedures
for the expeditious consideration of applications for the ap-
proval of dispositions, consolidations, or acquisitions under
this section. Such rules shall identify classes of transactions,
or specify criteria for transactions, that normally meet the
standards established in paragraph (4), and shall require
the Commission to grant or deny an application for ap-
proval of a transaction of such type within 90 days after
the conclusion of the hearing or opportunity to comment
under paragraph (4). If the Commission does not act within
90 days, such application shall be deemed granted unless
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the Commission finds that further consideration is required
to determine whether the proposed transaction meets the
standards of paragraph (4) and issues one or more orders
tolling the time for acting on the application for an addi-
tional 90 days.
‘‘(6) For purposes of this subsection, the terms ‘asso-
ciate company’, ‘electric utility company’, ‘gas utility com-
pany’, ‘holding company’, and ‘holding company system’
have the meaning given those terms in the Public Utility
Holding Company Act of 2002.’’.
SEC. 203. MARKET-BASED RATES.
(a) APPROVAL OF MARKET-BASED RATES.—Section
205 of the Federal Power Act (16 U.S.C. 824d) is amended
by adding at the end the following:
‘‘(h) The Commission may determine whether a mar-
ket-based rate for the sale of electric energy subject to the
jurisdiction of the Commission is just and reasonable and
not unduly discriminatory or preferential. In making such
determination, the Commission shall consider such factors
as the Commission may deem to be appropriate and in the
public interest, including to the extent the Commission con-
siders relevant to the wholesale power market—
‘‘(1) market power;
‘‘(2) the nature of the market and its response
mechanisms; and
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‘‘(3) reserve margins.’’.
(b) REVOCATION OF MARKET-BASED RATES.—Section
206 of the Federal Power Act (16 U.S.C. 824e) is amended
by adding at the end the following:
‘‘(f) Whenever the Commission, after a hearing had
upon its own motion or upon complaint, finds that a rate
charged by a public utility authorized to charge a market-
based rate under section 205 is unjust, unreasonable, un-
duly discriminatory or preferential, the Commission shall
determine the just and reasonable rate and fix the same by
order.’’.
SEC. 204. REFUND EFFECTIVE DATE.
Section 206(b) of the Federal Power Act (16 U.S.C.
824e(b)) is amended by—
(1) striking ‘‘the date 60 days after the filing of
such complaint nor later than 5 months after the ex-
piration of such 60-day period’’ in the second sen-
tence and inserting ‘‘the date of the filing of such
complaint nor later than 5 months after the filing of
such complaint’’;
(2) striking ‘‘60 days after’’ in the third sentence
and inserting ‘‘of’’; and
(3) striking ‘‘expiration of such 60-day period’’
in the third sentence and inserting ‘‘publication
date’’.
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SEC. 205. OPEN ACCESS TRANSMISSION BY CERTAIN UTILI-
TIES.
Part II of the Federal Power Act is further amended
by inserting after section 211 the following:
‘‘OPEN ACCESS BY UNREGULATED TRANSMITTING
UTILITIES
‘‘SEC. 211A. (a) Subject to section 212(h), the Commis-
sion may, by rule or order, require an unregulated trans-
mitting utility to provide transmission services—
‘‘(1) at rates that are comparable to those that
the unregulated transmitting utility charges itself,
and
‘‘(2) on terms and conditions (not relating to
rates) that are comparable to those under Commission
rules that require public utilities to offer open access
transmission services and that are not unduly dis-
criminatory or preferential.
‘‘(b) The Commission shall exempt from any rule or
order under this subsection any unregulated transmitting
utility that—
‘‘(1) sells no more than 4,000,000 megawatt
hours of electricity per year;
‘‘(2) does not own or operate any transmission
facilities that are necessary for operating an inter-
connected transmission system (or any portion there-
of); or
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‘‘(3) meets other criteria the Commission deter-
mines to be in the public interest.
‘‘(c) The rate changing procedures applicable to public
utilities under subsections (c) and (d) of section 205 are
applicable to unregulated transmitting utilities for pur-
poses of this section.
‘‘(d) In exercising its authority under paragraph (1),
the Commission may remand transmission rates to an un-
regulated transmitting utility for review and revision where
necessary to meet the requirements of subsection (a).
‘‘(e) The provision of transmission services under sub-
section (a) does not preclude a request for transmission
services under section 211.
‘‘(f) The Commission may not require a State or mu-
nicipality to take action under this section that constitutes
a private business use for purposes of section 141 of the
Internal Revenue Code of 1986 (26 U.S.C. 141).
‘‘(g) For purposes of this subsection, the term ‘unregu-
lated 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 either an entity described in section
201(f) or a rural electric cooperative.’’.
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SEC. 206. ELECTRIC RELIABILITY STANDARDS.
Part II of the Federal Power Act (16 U.S.C 824 et
seq.) is amended by inserting the following after section 215
as added by this Act:
‘‘SEC. 216. ELECTRIC RELIABILITY.
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) ‘bulk-power system’ means the network of
interconnected transmission facilities and generating
facilities;
‘‘(2) ‘electric reliability organization’ means a
self-regulating organization certified by the Commis-
sion under subsection (c) whose purpose is to promote
the reliability of the bulk-power system; and
‘‘(3) ‘reliability standard’ means a requirement
to provide for reliable operation of the bulk-power sys-
tem approved by the Commission under this section.
‘‘(b) JURISIDICTION AND APPLICABILITY.—The Com-
mission shall have jurisdiction, within the United States,
over an electric reliability organization, any regional enti-
ties, and all users, owners and operators of the bulk-power
system, including but not limited to the entities described
in section 201(f), for purposes of approving reliability
standards and enforcing compliance with this section. All
users, owners and operators of the bulk-power system shall
comply with reliability standards that take effect under this
section.
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‘‘(c) CERTIFICATION.—(1) The Commission shall issue
a final rule to implement the requirements of this section
not later than 180 days after the date of enactment of this
section.
‘‘(2) Following the issuance of a Commission rule
under paragraph (1), any person may submit an applica-
tion to the Commission for certification as an electric reli-
ability organization. The Commission may certify an ap-
plicant if the Commission determines that the applicant—
‘‘(A) has the ability to develop, and enforce reli-
ability standards that provide for an adequate level
of reliability of the bulk-power system;
‘‘(B) has established rules that—
‘‘(i) assure its independence of the users and
owners and operators of the bulk-power system;
while assuring fair stakeholder representation in
the selection of its directors and balanced deci-
sionmaking in any committee or subordinate or-
ganizational structure;
‘‘(ii) allocate equitably dues, fees, and other
charges among end users for all activities under
this section;
‘‘(iii) provide fair and impartial procedures
for enforcement of reliability standards through
imposition of penalties (including limitations on
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activities, functions, or operations, or other ap-
propriate sanctions); and
‘‘(iv) provide for reasonable notice and op-
portunity for public comment, due process, open-
ness, and balance of interests in developing reli-
ability standards and otherwise exercising its
duties.
‘‘(3) If the Commission receives two or more timely
applications that satisfy the requirements of this subsection,
the Commission shall approve only the application it con-
cludes will best implement the provisions of this section.
‘‘(d) RELIABILITY STANDARDS.—(1) An electric reli-
ability organization shall file a proposed reliability stand-
ard or modification to a reliability standard with the Com-
mission.
‘‘(2) The Commission may approve a proposed reli-
ability standard or modification to a reliability standard
if it determines that the standard is just, reasonable, not
unduly discriminatory or preferential, and in the public
interest. The Commission shall give due weight to the tech-
nical expertise of the electric reliability organization with
respect to the content of a proposed standard or modifica-
tion to a reliability standard, but shall not defer with re-
spect to its effect on competition.
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‘‘(3) The electric reliability organization and the Com-
mission shall rebuttably presume that a proposal from a
regional entity organized on an interconnection-wide basis
for a reliability standard or modification to a reliability
standard to be applicable on an interconnection-wide basis
is just, reasonable, and not unduly discriminatory or pref-
erential, and in the public interest.
‘‘(4) The Commission shall remand to the electric reli-
ability organization for further consideration a proposed re-
liability standard or a modification to a reliability stand-
ard that the Commission disapproves in whole or in part.
‘‘(5) The Commission, upon its own motion or upon
complaint, may order an electric reliability organization
to submit to the Commission a proposed reliability stand-
ard or a modification to a reliability standard that address-
es a specific matter if the Commission considers such a new
or modified reliability standard appropriate to carry out
this section.
‘‘(e) ENFORCEMENT.—(1) An electric reliability orga-
nization may impose a penalty on a user or owner or oper-
ator of the bulk-power system if the electric reliability orga-
nization, after notice and an opportunity for a hearing—
‘‘(A) finds that the user or owner or operator of
the bulk-power system has violated a reliability
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standard approved by the Commission under sub-
section (d); and
‘‘(B) files notice with the Commission, which
shall affirm, set aside or modify the action.
‘‘(2) On its own motion or upon complaint, the Com-
mission may order compliance with a reliability standard
and may impose a penalty against a user or owner or oper-
ator of the bulk-power system, if the Commission finds, after
notice and opportunity for a hearing, that the user or owner
or operator of the bulk-power system has violated or threat-
ens to violate a reliability standard.
‘‘(3) The Commission shall establish regulations au-
thorizing the electric reliability organization to enter into
an agreement to delegate authority to a regional entity for
the purpose of proposing and enforcing reliability stand-
ards (including related activities) if the regional entity sat-
isfies the provisions of subsection (c)(2) (A) and (B) and
the agreement promotes effective and efficient administra-
tion of bulk-power system reliability, and may modify such
delegation. The electric reliability organization and the
Commission shall rebuttably presume that a proposal for
delegation to a regional entity organized on an interconnec-
tion-wide basis promotes effective and efficient administra-
tion of bulk-power system reliability and should be ap-
proved. Such regulation may provide that the Commission
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may assign the electric reliability organization’s authority
to enforce reliability standards directly to a regional entity
consistent with the requirements of this paragraph.
‘‘(4) The Commission may take such action as is nec-
essary or appropriate against the electric reliability organi-
zation or a regional entity to ensure compliance with a reli-
ability standard or any Commission order affecting the
electric reliability organization or a regional entity.
‘‘(f) CHANGES IN ELECTRICITY RELIALB1LITY ORGANI-
ZATION RULES.—An electric reliability organization shall
file with the Commission for approval any proposed rule
or proposed rule change, accompanied by an explanation
of its basis and purpose. The Commission, upon its own
motion or complaint, may propose a change to the rules
of the electric reliability organization. A proposed rule or
proposed rule change shall take effect upon a finding by
the Commission, after notice and opportunity for comment,
that the change is just, reasonable, not unduly discrimina-
tory or preferential, is in the public interest, and satisfies
the requirements of subsection (c)(2).
‘‘(g) COORDINATION WITH CANADA AND MEXICO.—(1)
The electric reliability organization shall take all appro-
priate steps to gain recognition in Canada and Mexico.
‘‘(2) The President shall use his best efforts to enter
into international agreements with the governments of Can-
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notice and opportunity for comment, the Commission shall
issue a final order determining whether a State action is
inconsistent with a reliability standard, taking into consid-
eration any recommendation of the electric reliability orga-
nization.
‘‘(5) The Commission, after consultation with the elec-
tric reliability organization, may stay the effectiveness of
any State action, pending the Commission’s issuance of a
final order.
‘‘(j) APPLICATION OF ANTITRUST LAWS.—
‘‘(1) IN GENERAL.—To the extent undertaken to
develop, implement, or enforce a reliability standard,
each of the following activities shall not, in any ac-
tion under the antitrust laws, be deemed illegal per
se—
‘‘(A) activities undertaken by an electric re-
liability organization under this section, and
‘‘(B) activities of a user or owner or oper-
ator of the bulk-power system undertaken in good
faith under the rules of an electric reliability or-
ganization.
‘‘(2) RULE OF REASON.—In any action under
the antitrust laws, an activity described in paragraph
(1) shall be judged on the basis of its reasonableness,
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taking into account all relevant factors affecting com-
petition and reliability.
‘‘(3) DEFINITION.—For purposes of this sub-
section, ‘antitrust laws’ has the meaning given the
term in subsection (a) of the first section of the Clay-
ton Act (15 U.S.C. 12(a)), except that it includes sec-
tion 5 of the Federal Trade Commission Act (15 U.
S.C. 45) to the extent that section 5 applies to unfair
methods of competition.
‘‘(k) REGIONAL ADVISORY BODIES.—The Commission
shall establish a regional advisory body on the petition of
at least two-thirds of the States within a region that have
more than one-half of their electric load served within the
region. A regional advisory body shall be composed of one
member from each participating State in the region, ap-
pointed by the Governor of each State, and may include
representatives of agencies, States, and provinces outside the
United States. A regional advisory body may provide ad-
vice to the electric reliability organization, a regional reli-
ability entity, or the Commission regarding the governance
of an existing or proposed regional reliability entity within
the same region, whether a standard proposed to apply
within the region is just, reasonable, not unduly discrimi-
natory or preferential, and in the public interest, whether
fees proposed to be assessed within the region are just, rea-
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sonable, not unduly discriminatory or preferential, and in
the public interest and any other responsibilities requested
by the Commission. The Commission may give deference to
the advice of any such regional advisory body if that body
is organized on an interconnection-wide basis.
‘‘(l) APPLICATION TO ALASKA AND HAWAII.—The pro-
visions of this section do not apply to Alaska or Hawaii.’’.
SEC. 207. MARKET TRANSPARENCY RULES.
Part II of the Federal Power Act is further amended
by adding at the end the following:
‘‘SEC. 216. MARKET TRANSPARENCY RULES.
‘‘(a) COMMISSION RULES.—Not later than 180 days
after the date of enactment of this section, the Commission
shall issue rules establishing an electronic information sys-
tem to provide information about the availability and price
of wholesale electric energy and transmission services to the
Commission, State commissions, buyers and sellers of
wholesale electric energy, users of transmission services, and
the public on a timely basis.
‘‘(b) INFORMATION
REQUIRED.—The Commission
shall require—
‘‘(1) each regional transmission organization to
provide statistical information about the available ca-
pacity and capacity constraints of transmission fa-
cilities operated by the organization; and
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‘‘(2) each broker, exchange, or other market-mak-
ing entity that matches offers to sell and offers to buy
wholesale electric energy in interstate commerce to
provide statistical information about the amount and
sale price of sales of electric energy at wholesale in
interstate commerce it transacts.
‘‘(c) TIMELY BASIS.—The Commission shall require
the information required under subsection (b) to be posted
on the Internet as soon as practicable and updated as fre-
quently as practicable.
‘‘(d) PROTECTION OF SENSITIVE INFORMATION.—The
Commission shall exempt from disclosure commercial or fi-
nancial information that the Commission, by rule or order,
determines to be privileged, confidential, or otherwise sen-
sitive.’’.
SEC. 208. ACCESS TO TRANSMISSION BY INTERMITTENT
GENERATORS.
Part II of the Federal Power Act is further amended
by adding at the end the following:
‘‘SEC. 217. ACCESS TO TRANSMISSION BY INTERMITTENT
GENERATORS.
‘‘(a) FAIR TREATMENT OF INTERMITTENT GENERA-
TORS.—The Commission shall ensure that all transmitting
utilities provide transmission service to intermittent gen-
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erators in a manner that does not unduly prejudice or dis-
advantage such generators for characteristics that are—
‘‘(1) inherent to intermittent energy resources;
and
‘‘(2) are beyond the control of such generators.
‘‘(b) POLICIES.—The Commission shall ensure that the
requirement in subsection (a) is met by adopting such poli-
cies as it deems appropriate which shall include the fol-
lowing:
‘‘(1) Subject to the sole exception set forth in
paragraph (2), the Commission shall ensure that the
rates transmitting utilities charge intermittent gener-
ator customers for transmission services do not un-
duly prejudice or disadvantage intermittent generator
customers for scheduling deviations.
‘‘(2) The Commission may exempt a transmit-
ting utility from the requirement set forth in para-
graph (1) if the transmitting utility demonstrates
that scheduling deviations by its intermittent gener-
ator customers are likely to have an adverse impact
on the reliability of the transmitting utility’s system.
‘‘(3) The Commission shall ensure that to the ex-
tent any transmission charges recovering the trans-
mitting utility’s embedded costs are assessed to such
intermittent generators, they are assessed to such gen-
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erators on the basis of kilowatt-hours generated or
some other method to ensure that they are fully recov-
ered by the transmitting utility.
‘‘(4) The Commission shall require transmitting
utilities to offer to intermittent generators, and may
require transmitting utilities to offer to all trans-
mission customers, access to nonfirm transmission
service.
‘‘(c) DEFINITIONS.—As used in this section:
‘‘(1) The term ‘intermittent generator’ means a
facility that generates electricity using wind or solar
energy and no other energy source.
‘‘(2) The term ‘nonfirm transmission service’
means transmission service provided on an ‘as avail-
able’ basis.
‘‘(3) The term ‘scheduling deviation’ means de-
livery of more or less energy than has previously been
forecast in a schedule submitted by an intermittent
generator to a control area operator or transmitting
utility.’’.
SEC. 209. ENFORCEMENT.
(a) COMPLAINTS.—Section 306 of the Federal Power
Act (16 U.S.C. 825e) is amended by—
(1) inserting ‘‘electric utility,’’ after ‘‘Any per-
son,’’; and
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(2) inserting ‘‘transmitting utility,’’ after ‘‘li-
censee’’ each place it appears.
(b) INVESTIGATIONS.—Section 307(a) of the Federal
Power Act (16 U.S.C. 825f(a)) is amended by inserting ‘‘or
transmitting utility’’ after ‘‘any person’’ in the first sen-
tence.
(c) REVIEW OF COMMISSION ORDERS.—Section 313(a)
of the Federal Power Act (16 U.S.C. 8251) is amended by
inserting ‘‘electric utility,’’ after ‘‘Any person,’’ in the first
sentence.
(d) CRIMINAL PENALTIES.—Section 316(c) of the Fed-
eral Power Act (16 U.S.C. 825o(c)) is repealed.
(e) CIVIL PENALTIES.—Section 316A of the Federal
Power Act (16 U.S.C. 825o–1) is amended by striking ‘‘sec-
tion 211, 212, 213, or 214’’ each place it appears and in-
serting ‘‘Part II’’.
SEC. 210. ELECTRIC POWER TRANSMISSION SYSTEMS.
The Federal Government should be attentive to electric
power transmission issues, including issues that can be ad-
dressed through policies that facilitate investment in, the
enhancement of, and the efficiency of electric power trans-
mission systems.
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Subtitle 
B—Amendments 
to 
the
Public Utility Holding Company
Act
SEC. 221. SHORT TITLE.
This subtitle may be cited as the ‘‘Public Utility Hold-
ing Company Act of 2002’’.
SEC. 222. DEFINITIONS.
For purposes of this subtitle:
(1) The term ‘‘affiliate’’ of a company means
any company, 5 percent or more of the outstanding
voting securities of which are owned, controlled, or
held with power to vote, directly or indirectly, by
such company.
(2) The term ‘‘associate company’’ of a company
means any company in the same holding company
system with such company.
(3) The term ‘‘Commission’’ means the Federal
Energy Regulatory Commission.
(4) The term ‘‘company’’ means a corporation,
partnership, association, joint stock company, busi-
ness trust, or any organized group of persons, whether
incorporated or not, or a receiver, trustee, or other
liquidating agent of any of the foregoing.
(5) The term ‘‘electric utility company’’ means
any company that owns or operates facilities used for
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the generation, transmission, or distribution of elec-
tric energy for sale.
(6) The terms ‘‘exempt wholesale generator’’ and
‘‘foreign utility company’’ have the same meanings as
in sections 32 and 33, respectively, of the Public Util-
ity Holding Company Act of 1935 (15 U.S.C. 79z–5a,
79z–5b), as those sections existed on the day before the
effective date of this subtitle.
(7) The term ‘‘gas utility company’’ means any
company that owns or operates facilities used for dis-
tribution at retail (other than the distribution only in
enclosed portable containers or distribution to tenants
or employees of the company operating such facilities
for their own use and not for resale) of natural or
manufactured gas for heat, light, or power.
(8) The term ‘‘holding company’’ means—
(A) any company that directly or indirectly
owns, controls, or holds, with power to vote, 10
percent or more of the outstanding voting securi-
ties of a public utility company or of a holding
company of any public utility company; and
(B) any person, determined by the Commis-
sion, after notice and opportunity for hearing, to
exercise directly or indirectly (either alone or
pursuant to an arrangement or understanding
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with one or more persons) such a controlling in-
fluence over the management or policies of any
public utility company or holding company as to
make it necessary or appropriate for the rate
protection of utility customers with respect to
rates that such person be subject to the obliga-
tions, duties, and liabilities imposed by this sub-
title upon holding companies.
(9) The term ‘‘holding company system’’ means
a holding company, together with its subsidiary com-
panies.
(10) The term ‘‘jurisdictional rates’’ means rates
established by the Commission for the transmission of
electric energy in interstate commerce, the sale of elec-
tric energy at wholesale in interstate commerce, the
transportation of natural gas in interstate commerce,
and the sale in interstate commerce of natural gas for
resale for ultimate public consumption for domestic,
commercial, industrial, or any other use.
(11) The term ‘‘natural gas company’’ means a
person engaged in the transportation of natural gas
in interstate commerce or the sale of such gas in
interstate commerce for resale.
(12) The term ‘‘person’’ means an individual or
company.
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(13) The term ‘‘public utility’’ means any person
who owns or operates facilities used for transmission
of electric energy in interstate commerce or sales of
electric energy at wholesale in interstate commerce.
(14) The term ‘‘public utility company’’ means
an electric utility company or a gas utility company.
(15) The term ‘‘State commission’’ means any
commission, board, agency, or officer, by whatever
name designated, of a State, municipality, or other
political subdivision of a State that, under the laws
of such State, has jurisdiction to regulate public util-
ity companies.
(16) The term ‘‘subsidiary company’’ of a hold-
ing company means—
(A) any company, 10 percent or more of the
outstanding voting securities of which are di-
rectly or indirectly owned, controlled, or held
with power to vote, by such holding company;
and
(B) any person, the management or policies
of which the Commission, after notice and oppor-
tunity for hearing, determines to be subject to a
controlling influence, directly or indirectly, by
such holding company (either alone or pursuant
to an arrangement or understanding with one or
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more other persons) so as to make it necessary
for the rate protection of utility customers with
respect to rates that such person be subject to the
obligations, duties, and liabilities imposed by
this subtitle upon subsidiary companies of hold-
ing companies.
(17) The term ‘‘voting security’’ means any secu-
rity presently entitling the owner or holder thereof to
vote in the direction or management of the affairs of
a company.
SEC. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COM-
PANY ACT OF 1935.
The Public Utility Holding Company Act of 1935 (15
U.S.C. 79 et seq.) is repealed.
SEC. 224. FEDERAL ACCESS TO BOOKS AND RECORDS.
(a) IN GENERAL.—Each holding company and each
associate company thereof shall maintain, and shall make
available to the Commission, such books, accounts, memo-
randa, and other records as the Commission deems to be
relevant to costs incurred by a public utility or natural gas
company that is an associate company of such holding com-
pany and necessary or appropriate for the protection of
utility customers with respect to jurisdictional rates.
(b) AFFILIATE COMPANIES.—Each affiliate of a hold-
ing company or of any subsidiary company of a holding
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company shall maintain, and shall make available to the
Commission, such books, accounts, memoranda, and other
records with respect to any transaction with another affil-
iate, as the Commission deems to be relevant to costs in-
curred by a public utility or natural gas company that is
an associate company of such holding company and nec-
essary or appropriate for the protection of utility customers
with respect to jurisdictional rates.
(c) HOLDING COMPANY SYSTEMS.—The Commission
may examine the books, accounts, memoranda, and other
records of any company in a holding company system, or
any affiliate thereof, as the Commission deems to be rel-
evant to costs incurred by a public utility or natural gas
company within such holding company system and nec-
essary or appropriate for the protection of utility customers
with respect to jurisdictional rates.
(d) CONFIDENTIALITY.—No member, officer, or em-
ployee of the Commission shall divulge any fact or informa-
tion that may come to his or her knowledge during the
course of examination of books, accounts, memoranda, or
other records as provided in this section, except as may be
directed by the Commission or by a court of competent ju-
risdiction.
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SEC. 225. STATE ACCESS TO BOOKS AND RECORDS.
(a) In GENERAL.—Upon the written request of a State
commission having jurisdiction to regulate a public utility
company in a holding company system, the holding com-
pany or any associate company or affiliate thereof, other
than such public utility company, wherever located, shall
produce for inspection books, accounts, memoranda, and
other records that—
(1) have been identified in reasonable detail by
the State commission;
(2) the State commission deems are relevant to
costs incurred by such public utility company; and
(3) are necessary for the effective discharge of the
responsibilities of the State commission with respect
to such proceeding.
(b) LIMITATION.—Subsection (a) does not apply to
any person that is a holding company solely by reason of
ownership of one or more qualifying facilities under the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2601 et seq.).
(c) CONFIDENTIALITY OF INFORMATION.—The produc-
tion of books, accounts, memoranda, and other records
under subsection (a) shall be subject to such terms and con-
ditions as may be necessary and appropriate to safeguard
against unwarranted disclosure to the public of any trade
secrets or sensitive commercial information.
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(d) EFFECT ON STATE LAW.—Nothing in this section
shall preempt applicable State law concerning the provision
of books, accounts, memoranda, and other records, or in any
way limit the rights of any State to obtain books, accounts,
memoranda, and other records under any other Federal
law, contract, or otherwise.
(e) COURT JURISDICTION.—Any United States district
court located in the State in which the State commission
referred to in subsection (a) is located shall have jurisdic-
tion to enforce compliance with this section.
SEC. 226. EXEMPTION AUTHORITY.
(a) RULEMAKING.—Not later than 90 days after the
effective date of this subtitle, the Commission shall promul-
gate a final rule to exempt from the requirements of section
224 any person that is a holding company, solely with re-
spect to one or more—
(1) qualifying facilities under the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2601 et
seq.);
(2) exempt wholesale generators; or
(3) foreign utility companies.
(b) OTHER AUTHORITY.—The Commission shall ex-
empt a person or transaction from the requirements of sec-
tion 224, if, upon application or upon the motion of the
Commission—
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(1) the Commission finds that the books, ac-
counts, memoranda, and other records of any person
are not relevant to the jurisdictional rates of a public
utility or natural gas company; or
(2) the Commission finds that any class of trans-
actions is not relevant to the jurisdictional rates of a
public utility or natural gas company.
SEC. 227. AFFILIATE TRANSACTIONS.
(a) COMMISSION AUTHORITY UNAFFECTED.—Nothing
in this subtitle shall limit the authority of the Commission
under the Federal Power Act (16 U.S.C. 791a et seq.) to
require that jurisdictional rates are just and reasonable, in-
cluding the ability to deny or approve the pass through of
costs, the prevention of cross-subsidization, and the promul-
gation of such rules and regulations as are necessary or ap-
propriate for the protection of utility consumers.
(b) RECOVERY OF COSTS.—Nothing in this subtitle
shall preclude the Commission or a State commission from
exercising its jurisdiction under otherwise applicable law
to determine whether a public utility company, public util-
ity, or natural gas company may recover in rates any costs
of an activity performed by an associate company, or any
costs of goods or services acquired by such public utility
company from an associate company.
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SEC. 228. APPLICABILITY.
Except as otherwise specifically provided in this sub-
title, no provision of this subtitle shall apply to, or be
deemed to include—
(1) the United States;
(2) a State or any political subdivision of a
State;
(3) any foreign governmental authority not oper-
ating in the United States;
(4) any agency, authority, or instrumentality of
any entity referred to in paragraph (1), (2), or (3);
or
(5) any officer, agent, or employee of any entity
referred to in paragraph (1), (2), or (3) acting as
such in the course of his or her official duty.
SEC. 229. EFFECT ON OTHER REGULATIONS.
Nothing in this subtitle precludes the Commission or
a State commission from exercising its jurisdiction under
otherwise applicable law to protect utility customers.
SEC. 230. ENFORCEMENT.
The Commission shall have the same powers as set
forth in sections 306 through 317 of the Federal Power Act
(16 U.S.C. 825e–825p) to enforce the provisions of this sub-
title.
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SEC. 231. SAVINGS PROVISIONS.
(a) IN GENERAL.—Nothing in this subtitle prohibits
a person from engaging in or continuing to engage in ac-
tivities or transactions in which it is legally engaged or
authorized to engage on the effective date of this subtitle.
(b) EFFECT ON OTHER COMMISSION AUTHORITY.—
Nothing in this subtitle limits the authority of the Commis-
sion under the Federal Power Act (16 U.S.C. 791a et seq.)
(including section 301 of that Act) or the Natural Gas Act
(15 U.S.C. 717 et seq.) (including section 8 of that Act).
SEC. 232. IMPLEMENTATION.
Not later than 18 months after the date of enactment
of this subtitle, the Commission shall—
(1) promulgate such regulations as may be nec-
essary or appropriate to implement this subtitle
(other than section 225); and
(2) submit to the Congress detailed recommenda-
tions on technical and conforming amendments to
Federal law necessary to carry out this subtitle and
the amendments made by this subtitle.
SEC. 233. TRANSFER OF RESOURCES.
All books and records that relate primarily to the func-
tions transferred to the Commission under this subtitle shall
be transferred from the Securities and Exchange Commis-
sion to the Commission.
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SEC. 234. INTER-AGENCY REVIEW OF COMPETITION IN THE
WHOLESALE 
AND 
RETAIL 
MARKETS 
FOR
ELECTRIC ENERGY.
(a) TASK FORCE.—There is established an inter-agen-
cy task force, to be known as the ‘‘Electric Energy Market
Competition Task Force’’ (referred to in this section as the
‘‘task force’’), which shall consist of—
(1) one member each from—
(A) the Department of Justice, to be ap-
pointed by the Attorney General of the United
States;
(B) the Federal Energy Regulatory Com-
mission, to be appointed by the chairman of that
Commission; and
(C) the Federal Trade Commission, to be
appointed by the chairman of that Commission;
and
(2) two advisory members (who shall not vote),
of whom—
(A) one shall be appointed by the Secretary
of Agriculture to represent the Rural Utility
Service; and
(B) one shall be appointed by the Chairman
of the Securities and Exchange Commission to
represent that Commission.
(b) STUDY AND REPORT.—
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(1) STUDY.—The task force shall perform a
study and analysis of the protection and promotion
of competition within the wholesale and retail market
for electric energy in the United States.
(2) REPORT.—
(A) FINAL REPORT.—Not later than 1 year
after the effective date of this subtitle, the task
force shall submit a final report of its findings
under paragraph (1) to the Congress.
(B) PUBLIC COMMENT.—At least 60 days
before submission of a final report to the Con-
gress under subparagraph (A), the task force
shall publish a draft report in the Federal Reg-
ister to provide for public comment.
(c) FOCUS.—The study required by this section shall
examine—
(1) the best means of protecting competition
within the wholesale and retail electric market;
(2) activities within the wholesale and retail
electric market that may allow unfair and unjustified
discriminatory and deceptive practices;
(3) activities within the wholesale and retail
electric market, including mergers and acquisitions,
that deny market access or suppress competition;
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(4) cross-subsidization that may occur between
regulated and nonregulated activities; and
(5) the role of State public utility commissions
in regulating competition in the wholesale and retail
electric market.
(d) CONSULTATION.—In performing the study required
by this section, the task force shall consult with and solicit
comments from its advisory members, the States, represent-
atives of the electric power industry, and the public.
SEC. 235. GAO STUDY ON IMPLEMENTATION.
(a) STUDY.—The Comptroller General shall conduct a
study of the success of the Federal Government and the
States during the 18-month period following the effective
date of this subtitle in—
(1) the prevention of anticompetitive practices
and other abuses by public utility holding companies,
including cross-subsidization and other market power
abuses; and
(2) the promotion of competition and efficient
energy markets to the benefit of consumers.
(b) REPORT
TO CONGRESS.—Not earlier than 18
months after the effective date of this subtitle or later than
24 months after that effective date, the Comptroller General
shall submit a report to the Congress on the results of the
study conducted under subsection (a), including probable
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causes of its findings and recommendations to the Congress
and the States for any necessary legislative changes.
SEC. 236. EFFECTIVE DATE.
This subtitle shall take effect 18 months after the date
of enactment of this subtitle.
SEC. 237. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such funds as
may be necessary to carry out this subtitle.
SEC. 238. CONFORMING AMENDMENTS TO THE FEDERAL
POWER ACT.
(a) CONFLICT OF JURISDICTION.—Section 318 of the
Federal Power Act (16 U.S.C. 825q) is repealed.
(b) DEFINITIONS.—(1) Section 201(g) of the Federal
Power Act (16 U.S.C. 824(g)) is amended by striking
‘‘1935’’ and inserting ‘‘2002’’.
(2) Section 214 of the Federal Power Act (16 U.S.C.
824m) is amended by striking ‘‘1935’’ and inserting
‘‘2002’’.
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Subtitle 
C—Amendments 
to 
the
Public Utility Regulatory Poli-
cies Act of 1978
SEC. 241. REAL-TIME PRICING AND TIME-OF-USE METERING
STANDARDS.
(a) ADOPTION OF STANDARDS.—Section 111(d) of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2621(d)) is amended by adding at the end the following:
‘‘(11) REAL-TIME
PRICING.—(A) Each electric
utility shall, at the request of an electric consumer,
provide electric service under a real-time rate sched-
ule, under which the rate charged by the electric util-
ity varies by the hour (or smaller time interval) ac-
cording to changes in the electric utility’s wholesale
power cost. The real-time pricing service shall enable
the electric consumer to manage energy use and cost
through real-time metering and communications tech-
nology.
‘‘(B) For purposes of implementing this para-
graph, any reference contained in this section to the
date of enactment of the Public Utility Regulatory
Policies Act of 1978 shall be deemed to be a reference
to the date of enactment of this paragraph.
‘‘(C) Notwithstanding subsections (b) and (c) of
section 112, each State regulatory authority shall con-
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sider and make a determination concerning whether
it is appropriate to implement the standard set out
in subparagraph (A) not later than 1 year after the
date of enactment of this paragraph.
‘‘(12) TIME-OF-USE METERING.—(A) Each elec-
tric utility shall, at the request of an electric con-
sumer, provide electric service under a time-of-use
rate schedule which enables the electric consumer to
manage energy use and cost through time-of-use me-
tering and technology.
‘‘(B) For purposes of implementing this para-
graph, any reference contained in this section to the
date of enactment of the Public Utility Regulatory
Policies Act of 1978 shall be deemed to be a reference
to the date of enactment of this paragraph.
‘‘(C) Notwithstanding subsections (b) and (c) of
section 112, each State regulatory authority shall con-
sider and make a determination concerning whether
it is appropriate to implement the standards set out
in subparagraph (A) not later than 1 year after the
date of enactment of this paragraph.’’.
(b) SPECIAL RULES.—Section 115 of the Public Util-
ity Regulatory Policies Act of 1978 (16 U.S.C. 2625) is
amended by adding at the end the following:
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‘‘(i) REAL-TIME PRICING.—In a State that permits
third-party marketers to sell electric energy to retail electric
consumers, the electric consumer shall be entitled to receive
the same real-time metering and communication service as
a direct retail electric consumer of the electric utility.
‘‘(j) TIME-OF-USE METERING.—In a State that per-
mits third-party marketers to sell electric energy to retail
electric consumers, the electric consumer shall be entitled
to receive the same time-of-use metering and communica-
tion service as a direct retail electric consumer of the elec-
tric utility.’’.
SEC. 242. ADOPTION OF ADDITIONAL STANDARDS.
(a) ADOPTION OF STANDARDS.—Section 113(b) of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2623(b)) is amended by adding at the end the following:
‘‘(6) DISTRIBUTED GENERATION.—Each electric
utility shall provide distributed generation, combined
heat and power, and district heating and cooling sys-
tems competitive access to the local distribution grid
and competitive pricing of service, and shall use sim-
plified standard contracts for the interconnection of
generating facilities that have a power production ca-
pacity of 250 kilowatts or less.
‘‘(7) 
DISTRIBUTION
INTERCONNECTIONS.—No
electric utility may refuse to interconnect a gener-
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ating facility with the distribution facilities of the
electric utility if the owner or operator of the gener-
ating facility complies with technical standards
adopted by the State regulatory authority and agrees
to pay the costs established by such State regulatory
authority.
‘‘(8) MINIMUM FUEL AND TECHNOLOGY DIVER-
SITY STANDARD.—Each electric utility shall develop a
plan to minimize dependence on one fuel source and
to ensure that the electric energy it sells to consumers
is generated using a diverse range of fuels and tech-
nologies, including renewable technologies.
‘‘(9) FOSSIL
FUEL
EFFICIENCY.—Each electric
utility shall develop and implement a ten-year plan
to increase the efficiency of its fossil fuel generation
and shall monitor and report to its State regulatory
authority excessive greenhouse gas emissions resulting
from the inefficient operation of its fossil fuel gener-
ating plants.’’.
(b) TIME FOR ADOPTING STANDARDS.—Section 113 of
the Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 2623) is further amended by adding at the end the
following:
‘‘(d) SPECIAL RULE.—For purposes of implementing
paragraphs (6), (7), (8), and (9) of subsection (b), any ref-
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erence contained in this section to the date of enactment
of the Public Utility Regulatory Policies Act of 1978 shall
be deemed to be a reference to the date of enactment of this
subsection.’’.
SEC. 243. TECHNICAL ASSISTANCE.
Section 132(c) of the Public Utility Regulatory Poli-
cies Act of 1978 (16 U.S.C. 2642(c)) is amended to read
as follows:
‘‘(c) TECHNICAL ASSISTANCE FOR CERTAIN RESPON-
SIBILITIES.—The Secretary may provide such technical as-
sistance as he determines appropriate to assist State regu-
latory authorities and electric utilities in carrying out their
responsibilities under section 111(d)(11) and paragraphs
(6), (7), (8), and (9) of section 113(b).’’.
SEC. 244. COGENERATION AND SMALL POWER PRODUCTION
PURCHASE AND SALE REQUIREMENTS.
(a) TERMINATION
OF MANDATORY PURCHASE
AND
SALE REQUIREMENTS.—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 enactment of this subsection, no electric utility
shall be required to enter into a new contract or obli-
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gation to purchase electric energy from a qualifying
cogeneration facility or a qualifying small power pro-
duction facility under this section if the Commission
finds that the qualifying cogeneration facility or
qualifying small power production facility has access
to independently administered, auction-based day
ahead and real time wholesale markets for the sale of
electric energy.
‘‘(2) OBLIGATION TO SELL.—After the date of en-
actment of this subsection, no electric utility shall be
required to enter into a new contract or obligation to
sell electric energy to a qualifying cogeneration facil-
ity or a qualifying small power production facility
under this section if competing retail electric sup-
pliers are able to provide electric energy to the quali-
fying cogeneration facility or qualifying small power
production facility.
‘‘(3) NO EFFECT ON EXISTING RIGHTS AND REM-
EDIES.—Nothing in this subsection affects the rights
or remedies of any party under any contract or obli-
gation, in effect on the date of enactment of this sub-
section, to purchase electric energy or capacity from
or to sell electric energy or capacity to a facility
under this Act (including the right to recover costs of
purchasing electric energy or capacity).
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‘‘(4) RECOVERY OF COSTS.—
‘‘(A) REGULATION.—To ensure recovery by
an electric utility that purchases electric energy
or capacity from a qualifying facility pursuant
to any legally enforceable obligation entered into
or imposed under this section before the date of
enactment of this subsection, of all prudently in-
curred costs associated with the purchases, the
Commission shall issue and enforce such regula-
tions as may be required to ensure that the elec-
tric utility shall collect the prudently incurred
costs associated with such purchases.
‘‘(B) ENFORCEMENT.—A regulation under
subparagraph (A) shall be enforceable in accord-
ance with the provisions of law applicable to en-
forcement of regulations under the Federal Power
Act (16 U.S.C. 791a et seq.).’’.
(b) ELIMINATION OF OWNERSHIP LIMITATIONS.—
(1) Section 3(17)(C) of the Federal Power Act
(16 U.S.C. 796(17)(C)) is amended to read as follows:
‘‘(C) ‘qualifying small power production fa-
cility’ means a small power production facility
that the Commission determines, by rule, meets
such requirements (including requirements re-
specting minimum size, fuel use, and fuel effi-
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ciency) as the Commission may, by rule, pre-
scribe.’’.
(2) Section 3(18)(B) of the Federal Power Act
(16 U.S.C. 796(18)(B)) is amended to read as follows:
‘‘(B) ‘qualifying cogeneration facility’ means a cogen-
eration facility that the Commission determines, by rule,
meets such requirements (including requirements respecting
minimum size, fuel use, and fuel efficiency) as the Commis-
sion may, by rule, prescribe.’’.
SEC. 245. NET METERING.
(a) ADOPTION OF STANDARD.—Section 111(d) of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2621(d)) is further amended by adding at the end the fol-
lowing:
‘‘(13) NET METERING.—(A) Each electric utility
shall make available upon request net metering serv-
ice to any electric consumer that the electric utility
serves.
‘‘(B) For purposes of implementing this para-
graph, any reference contained in this section to the
date of enactment of the Public Utility Regulatory
Policies Act of 1978 shall be deemed to be a reference
to the date of enactment of this paragraph.
‘‘(C) Notwithstanding subsections (b) and (c) of
section 112, each State regulatory authority shall con-
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sider and make a determination concerning whether
it is appropriate to implement the standard set out
in subparagraph (A) not later than 1 year after the
date of enactment of this paragraph.’’.
(b) SPECIAL RULES FOR NET METERING.—Section
115 of the Public Utility Regulatory Policies Act of 1978
(16 U.S.C. 2625) is further amended by adding at the end
the following:
‘‘(k) NET METERING.—
‘‘(1) 
RATES
AND
CHARGES.—An 
electric
utility—
‘‘(A) shall charge the owner or operator of
an on-site generating facility rates and charges
that are identical to those that would be charged
other electric consumers of the electric utility in
the same rate class; and
‘‘(B) shall not charge the owner or operator
of an on-site generating facility any additional
standby, capacity, interconnection, or other rate
or charge.
‘‘(2) MEASUREMENT.—An electric utility that
sells electric energy to the owner or operator of an on-
site generating facility shall measure the quantity of
electric energy produced by the on-site facility and the
quantity of electric energy consumed by the owner or
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operator of an on-site generating facility during a
billing period in accordance with normal metering
practices.
‘‘(3) ELECTRIC
ENERGY
SUPPLIED
EXCEEDING
ELECTRIC ENERGY GENERATED.—If the quantity of
electric energy sold by the electric utility to an on-site
generating facility exceeds the quantity of electric en-
ergy supplied by the on-site generating facility to the
electric utility during the billing period, the electric
utility may bill the owner or operator for the net
quantity of electric energy sold, in accordance with
normal metering practices.
‘‘(4) ELECTRIC ENERGY GENERATED EXCEEDING
ELECTRIC ENERGY SUPPLIED.—If the quantity of elec-
tric energy supplied by the on-site generating facility
to the electric utility exceeds the quantity of electric
energy sold by the electric utility to the on-site gener-
ating facility during the billing period—
‘‘(A) the electric utility may bill the owner
or operator of the on-site generating facility for
the appropriate charges for the billing period in
accordance with paragraph (2); and
‘‘(B) the owner or operator of the on-site
generating facility shall be credited for the excess
kilowatt-hours generated during the billing pe-
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riod, with the kilowatt-hour credit appearing on
the bill for the following billing period.
‘‘(5) SAFETY AND PERFORMANCE STANDARDS.—
An eligible on-site generating facility and net meter-
ing system used by an electric consumer shall meet all
applicable safety, performance, reliability, and inter-
connection standards established by the National
Electrical Code, the Institute of Electrical and Elec-
tronics Engineers, and Underwriters Laboratories.
‘‘(6) ADDITIONAL
CONTROL
AND
TESTING
RE-
QUIREMENTS.—The Commission, after consultation
with State regulatory authorities and nonregulated
electric utilities and after notice and opportunity for
comment, may adopt, by rule, additional control and
testing requirements for on-site generating facilities
and net metering systems that the Commission deter-
mines are necessary to protect public safety and sys-
tem reliability.
‘‘(7) DEFINITIONS.—For purposes of this sub-
section:
‘‘(A) The term ‘eligible on-site generating
facility’ means—
‘‘(i) a facility on the site of a residen-
tial electric consumer with a maximum gen-
erating capacity of 10 kilowatts or less that
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is fueled by solar energy, wind energy, or
fuel cells; or
‘‘(ii) a facility on the site of a commer-
cial electric consumer with a maximum
generating capacity of 500 kilowatts or less
that is fueled solely by a renewable energy
resource, landfill gas, or a high efficiency
system.
‘‘(B) The term ‘renewable energy resource’
means solar, wind, biomass, or geothermal en-
ergy.
‘‘(C) The term ‘high efficiency system’
means fuel cells or combined heat and power.
‘‘(D) The term ‘net metering service’ means
service to an electric consumer under which elec-
tric energy generated by that electric consumer
from an eligible on-site generating facility and
delivered to the local distribution facilities may
be used to offset electric energy provided by the
electric utility to the electric consumer during
the applicable billing period.’’.
Subtitle D—Consumer Protections
SEC. 251. INFORMATION DISCLOSURE.
(a) OFFERS AND SOLICITATIONS.—The Federal Trade
Commission shall issue rules requiring each electric utility
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that makes an offer to sell electric energy, or solicits electric
consumers to purchase electric energy to provide the electric
consumer 
a 
statement 
containing 
the 
following
information—
(1) the nature of the service being offered, includ-
ing information about interruptibility of service;
(2) the price of the electric energy, including a
description of any variable charges;
(3) a description of all other charges associated
with the service being offered, including access
charges, exit charges, back-up service charges, strand-
ed cost recovery charges, and customer service charges;
and
(4) information the Federal Trade Commission
determines is technologically and economically fea-
sible to provide, is of assistance to electric consumers
in making purchasing decisions, and concerns—
(A) the product or its price;
(B) the share of electric energy that is gen-
erated by each fuel type; and
(C) the environmental emissions produced
in generating the electric energy.
(b) PERIODIC BILLINGS.—The Federal Trade Commis-
sion shall issue rules requiring any electric utility that sells
electric energy to transmit to each of its electric consumers,
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in addition to the information transmitted pursuant to sec-
tion 115(f) of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2625(f)), a clear and concise statement
containing the information described in subsection (a)(4)
for each billing period (unless such information is not rea-
sonably ascertainable by the electric utility).
SEC. 252. CONSUMER PRIVACY.
(a) PROHIBITION.—The Federal Trade Commission
shall issue rules prohibiting any electric utility that obtains
consumer information in connection with the sale or deliv-
ery of electric energy to an electric consumer from using,
disclosing, or permitting access to such information unless
the electric consumer to whom such information relates pro-
vides prior written approval.
(b) PERMITTED USE.—The rules issued under this sec-
tion shall not prohibit any electric utility from using, dis-
closing, or permitting access to consumer information re-
ferred to in subsection (a) for any of the following
purposes—
(1) to facilitate an electric consumer’s change in
selection of an electric utility under procedures ap-
proved by the State or State regulatory authority;
(2) to initiate, render, bill, or collect for the sale
or delivery of electric energy to electric consumers or
for related services;
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(3) to protect the rights or property of the person
obtaining such information;
(4) to protect retail electric consumers from
fraud, abuse, and unlawful subscription in the sale or
delivery of electric energy to such consumers;
(5) for law enforcement purposes; or
(6) for purposes of compliance with any Federal,
State, or local law or regulation authorizing disclo-
sure of information to a Federal, State, or local agen-
cy.
(c) AGGREGATE CONSUMER INFORMATION.—The rules
issued under this subsection may permit a person to use,
disclose, and permit access to aggregate consumer informa-
tion and may require an electric utility to make such infor-
mation available to other electric utilities upon request and
payment of a reasonable fee.
(d) DEFINITIONS.—As used in this section:
(1) The term ‘‘aggregate consumer information’’
means collective data that relates to a group or cat-
egory of retail electric consumers, from which indi-
vidual consumer identities and characteristics have
been removed.
(2) The term ‘‘consumer information’’ means in-
formation that relates to the quantity, technical con-
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figuration, type, destination, or amount of use of elec-
tric energy delivered to any retail electric consumer.
SEC. 253. OFFICE OF CONSUMER ADVOCACY.
(a) DEFINITIONS.—In this section:
(1) 
COMMISSION.—The 
term 
‘‘Commission’’
means the Federal Energy Regulatory Commission.
(2) ENERGY CUSTOMER.—The term ‘‘energy cus-
tomer’’ means a residential customer or a small com-
mercial customer that receives products or services
from a public utility or natural gas company under
the jurisdiction of the Commission.
(3) NATURAL GAS COMPANY.—The term ‘‘natural
gas company’’ has the meaning given the term in sec-
tion 2 of the Natural Gas Act (15 U.S.C. 717a), as
modified by section 601(a) of the Natural Gas Policy
Act of 1978 (15 U.S.C. 3431(a)).
(4) OFFICE.—The term ‘‘Office’’ means the Office
of Consumer Advocacy established by subsection
(b)(1).
(5) PUBLIC UTILITY.—The term ‘‘public utility’’
has the meaning given the term in section 201(e) of
the Federal Power Act (16 U.S.C. 824(e)).
(6) SMALL COMMERCIAL CUSTOMER.—The term
‘‘small commercial customer’’ means a commercial
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customer that has a peak demand of not more than
1,000 kilowatts per hour.
(b) OFFICE.—
(1) ESTABLISHMENT.—There is established with-
in the Department of Justice the Office of Consumer
Advocacy.
(2) DIRECTOR.—The Office shall be headed by a
Director to be appointed by the President, by and
with the advice and consent of the Senate.
(3) DUTIES.—The Office may represent the in-
terests of energy customers on matters concerning
rates or service of public utilities and natural gas
companies 
under 
the 
jurisdiction 
of 
the
Commission—
(A) at hearings of the Commission;
(B) in judicial proceedings in the courts of
the United States;
(C) at hearings or proceedings of other Fed-
eral regulatory agencies and commissions.
SEC. 254. UNFAIR TRADE PRACTICES.
(a) SLAMMING.—The Federal Trade Commission shall
issue rules prohibiting the change of selection of an electric
utility except with the informed consent of the electric con-
sumer.
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(b) CRAMMING.—The Federal Trade Commission shall
issue rules prohibiting the sale of goods and services to an
electric consumer unless expressly authorized by law or the
electric consumer.
SEC. 255. APPLICABLE PROCEDURES.
The Federal Trade Commission shall proceed in ac-
cordance with section 553 of title 5, United States Code,
when prescribing a rule required by this subtitle.
SEC. 256. FEDERAL TRADE COMMISSION ENFORCEMENT.
Violation of a rule issued under this subtitle shall be
treated as a violation of a rule under section 18 of the Fed-
eral Trade Commission Act (15 U.S.C. 57a) respecting un-
fair or deceptive acts or practices. All functions and powers
of the Federal Trade Commission under such Act are avail-
able to the Federal Trade Commission to enforce compliance
with this subtitle notwithstanding any jurisdictional limits
in such Act.
SEC. 257. STATE AUTHORITY.
Nothing in this subtitle shall be construed to preclude
a State or State regulatory authority from prescribing and
enforcing laws, rules, or procedures regarding the practices
which are the subject of this section.
SEC. 258. APPLICATION OF SUBTITLE.
The provisions of this subtitle apply to each electric
utility if the total sales of electric energy by such utility
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for purposes other than resale exceed 500 million kilowatt-
hours per calendar year. The provisions of this subtitle do
not apply to the operations of an electric utility to the ex-
tent that such operations relate to sales of electric energy
for purposes of resale.
SEC. 259. DEFINITIONS.
As used in this subtitle:
(1) The term ‘‘aggregate consumer information’’
means collective data that relates to a group or cat-
egory of electric consumers, from which individual
consumer identities and identifying characteristics
have been removed.
(2) The term ‘‘consumer information’’ means in-
formation that relates to the quantity, technical con-
figuration, type, destination, or amount of use of elec-
tric energy delivered to an electric consumer.
(3) The terms ‘‘electric consumer’’, ‘‘electric util-
ity’’, and ‘‘State regulatory authority’’ have the
meanings given such terms in section 3 of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C.
2602).
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Subtitle E—Renewable Energy and
Rural Construction Grants
SEC. 261. RENEWABLE ENERGY PRODUCTION INCENTIVE.
(a) INCENTIVE PAYMENTS.—Section 1212(a) of the
Energy Policy Act of 1992 (42 U.S.C. 13317(a)) is amended
by striking ‘‘and which satisfies’’ and all that follows
through ‘‘Secretary shall establish.’’ and inserting the fol-
lowing: ‘‘. The Secretary shall establish other procedures
necessary for efficient administration of the program. The
Secretary shall not establish any criteria or procedures that
have the effect of assigning to proposals a higher or lower
priority for eligibility or allocation of appropriated funds
on the basis of the energy source proposed.’’.
(b) QUALIFIED RENEWABLE ENERGY FACILITY.—Sec-
tion 1212(b) of the Energy Policy Act of 1992 (42 U.S.C.
13317(b)) is amended—
(1) by striking ‘‘a State or any political’’ and
all that follows through ‘‘nonprofit electrical coopera-
tive’’ and inserting the following: ‘‘a nonprofit elec-
trical cooperative, a public utility described in section
115 of such Code, a State, Commonwealth, territory,
or possession of the United States or the District of
Columbia, or a political subdivision thereof, or an In-
dian tribal government or subdivision thereof,’’; and
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(2) by inserting ‘‘landfill gas, incremental hy-
dropower, ocean’’ after ‘‘wind, biomass,’’.
(c) ELIGIBILITY WINDOW.—Section 1212(c) of the En-
ergy Policy Act of 1992 (42 U.S.C. 13317(c)) is amended
by striking ‘‘during the 10-fiscal year period beginning
with the first full fiscal year occurring after the enactment
of this section’’ and inserting ‘‘before October 1, 2013’’.
(d) PAYMENT PERIOD.—Section 1212(d) of the Energy
Policy Act of 1992 (42 U.S.C. 13317(d)) is amended by in-
serting ‘‘or in which the Secretary finds that all necessary
Federal and State authorizations have been obtained to
begin construction of the facility’’ after ‘‘eligible for such
payments’’.
(e) AMOUNT OF PAYMENT.—Section 1212(e)(1) of the
Energy Policy Act of 1992 (42 U.S.C. 13317(e)(1)) is
amended by inserting ‘‘landfill gas, incremental hydro-
power, ocean’’ after ‘‘wind, biomass,’’.
(f) SUNSET.—Section 1212(f) of the Energy Policy Act
of 1992 (42 U.S.C. 13317(f)) is amended by striking ‘‘the
expiration of’’ and all that follows through ‘‘of this section’’
and inserting ‘‘September 30, 2023’’.
(g) INCREMENTAL HYDROPOWER; AUTHORIZATION OF
APPROPRIATIONS.—Section 1212 of the Energy Policy Act
of 1992 (42 U.S.C. 13317) is further amended by striking
subsection (g) and inserting the following:
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‘‘(g) INCREMENTAL HYDROPOWER.—
‘‘(1) PROGRAMS.—Subject to subsection (h)(2), if
an incremental hydropower program meets the re-
quirements of this section, as determined by the Sec-
retary, the incremental hydropower program shall be
eligible to receive incentive payments under this sec-
tion.
‘‘(2) DEFINITION
OF
INCREMENTAL
HYDRO-
POWER.—In this subsection, the term ‘incremental hy-
dropower’ means additional generating capacity
achieved from increased efficiency or additions of new
capacity at a hydroelectric facility in existence on the
date of enactment of this paragraph.
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN
GENERAL.—Subject to paragraph (2),
there are authorized to be appropriated such sums as
may be necessary to carry out this section for fiscal
years 2003 through 2023.
‘‘(2) LIMITATION ON FUNDS USED FOR INCRE-
MENTAL
HYDROPOWER
PROGRAMS.—Not more than
30 percent of the amounts made available under
paragraph (1) shall be used to carry out programs de-
scribed in subsection (g)(2).
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‘‘(3) AVAILABILITY
OF
FUNDS.—Funds made
available under paragraph (1) shall remain available
until expended.’’.
SEC. 
262. 
ASSESSMENT 
OF 
RENEWABLE 
ENERGY 
RE-
SOURCES.
(a) RESOURCE
ASSESSMENT.—Not later than 3
months after the date of enactment of this title, and each
year thereafter, the Secretary of Energy shall review the
available assessments of renewable energy resources avail-
able within the United States, including solar, wind, bio-
mass, ocean, geothermal, and hydroelectric energy resources,
and undertake new assessments as necessary, taking into
account changes in market conditions, available tech-
nologies and other relevant factors.
(b) CONTENTS OF REPORTS.—Not later than 1 year
after the date of enactment of this title, and each year there-
after, the Secretary shall publish a report based on the as-
sessment under subsection (a). The report shall contain—
(1) a detailed inventory describing the available
amount and characteristics of the renewable energy
resources, and
(2) such other information as the Secretary of
Energy believes would be useful in developing such re-
newable energy resources, including descriptions of
surrounding terrain, population and load centers,
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nearby energy infrastructure, location of energy and
water resources, and available estimates of the costs
needed to develop each resource, together with an
identification of any barriers to providing adequate
transmission for remote sources of renewable energy
resources to current and emerging markets, rec-
ommendations for removing or addressing such bar-
riers, and ways to provide access to the grid that do
not unfairly disadvantage renewable or other energy
producers.
SEC. 263. FEDERAL PURCHASE REQUIREMENT.
(a) REQUIREMENT.—The President shall seek to ensure
that, to the extent economically feasible and technically
practicable, of the total amount of electric energy the Fed-
eral Government consumes during any fiscal year—
(1) not less than 3 percent in fiscal years 2003
through 2004,
(2) not less than 5 percent in fiscal years 2005
through 2009, and
(3) not less than 7.5 percent in fiscal year 2010
and each fiscal year thereafter,
shall be renewable energy. The President shall encourage the
use of innovative purchasing practices by Federal agencies.
(b) DEFINITION.—For purposes of this section, the
term ‘‘renewable energy’’ means electric energy generated
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from solar, wind, biomass, geothermal, fuel cells, municipal
solid waste, or additional hydroelectric generation capacity
achieved from increased efficiency or additions of new ca-
pacity.
(c) TRIBAL POWER GENERATION.—The President shall
seek to ensure that, to the extent economically feasible and
technically practicable, not less than one-tenth of the
amount specified in subsection (a) shall be renewable energy
that is generated by an Indian tribe or by a corporation,
partnership, or business association which is wholly or ma-
jority owned, directly or indirectly, by an Indian tribe. For
purposes of this subsection, the term ‘‘Indian tribe’’ means
any Indian tribe, band, nation, or other organized group
or community, including any Alaskan Native village or re-
gional or village corporation as defined in or established
pursuant to the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.), which is recognized as eligible for the
special programs and services provided by the United States
to Indians because of their status as Indians.
(d) BIENNIAL REPORT.—In 2004 and every 2 years
thereafter, the Secretary of Energy shall report to the Com-
mittee on Energy and Natural Resources of the Senate and
the appropriate committees of the House of Representatives
on the progress of the Federal Government in meeting the
goals established by this section.
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SEC. 264. RENEWABLE PORTFOLIO STANDARD.
Title VI of the Public Utility Regulatory Policies Act
of 1978 is amended by adding at the end the following:
‘‘SEC. 606. FEDERAL RENEWABLE PORTFOLIO STANDARD.
‘‘(a) MINIMUM RENEWABLE GENERATION REQUIRE-
MENT.—For each calendar year beginning in calendar year
2005, each retail electric supplier shall submit to the Sec-
retary, not later than April 1 of the following calendar year,
renewable energy credits in an amount equal to the required
annual percentage specified in subsection (b).
‘‘(b) REQUIRED ANNUAL PERCENTAGE.—(1) For cal-
endar years 2005 through 2020, the required annual per-
centage of the retail electric supplier’s base amount that
shall be generated from renewable energy resources shall be
the percentage specified in the following table:
Required annual
‘‘Calendar Years
percentage
2005 through 2006 .....................................................................
1.0
2007 through 2008 .....................................................................
2.2
2009 through 2010 .....................................................................
3.4
2011 through 2012 .....................................................................
4.6
2013 through 2014 .....................................................................
5.8
2015 through 2016 .....................................................................
7.0
2017 through 2018 .....................................................................
8.5
2019 through 2020 .....................................................................
10.0.
‘‘(2) Not later than January 1, 2015, the Secretary
may, by rule, establish required annual percentages in
amounts not less than 10.0 for calendar years 2020 through
2030.
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‘‘(c) SUBMISSION OF CREDITS.—(1) A retail electric
supplier may satisfy the requirements of subsection (a)
through the submission of renewable energy credits—
‘‘(A) issued to the retail electric supplier under
subsection (d);
‘‘(B) obtained by purchase or exchange under
subsection (e); or
‘‘(C) borrowed under subsection (f).
‘‘(2) A credit may be counted toward compliance with
subsection (a) only once.
‘‘(d) ISSUANCE OF CREDITS.—(1) The Secretary shall
establish, not later than 1 year after the date of enactment
of this section, a program to issue, monitor the sale or ex-
change of, and track renewable energy credits.
‘‘(2) Under the program, an entity that generates elec-
tric energy through the use of a renewable energy resource
may apply to the Secretary for the issuance of renewable
energy credits. The application shall indicate—
‘‘(A) the type of renewable energy resource used
to produce the electricity,
‘‘(B) the location where the electric energy was
produced, and
‘‘(C) any other information the Secretary deter-
mines appropriate.
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‘‘(3)(A) Except as provided in paragraphs (B), (C),
and (D), the Secretary shall issue to an entity one renew-
able energy credit for each kilowatt-hour of electric energy
the entity generates from the date of enactment of this sec-
tion and in each subsequent calendar year through the use
of a renewable energy resource at an eligible facility.
‘‘(B) For incremental hydropower the credits shall be
calculated based on the expected increase in average annual
generation resulting from the efficiency improvements or
capacity additions. The number of credits shall be cal-
culated using the same water flow information used to de-
termine a historic average annual generation baseline for
the hydroelectric facility and certified by the Secretary or
the Federal Energy Regulatory Commission. The calcula-
tion of the credits for incremental hydropower shall not be
based on any operational changes at the hydroelectric facil-
ity not directly associated with the efficiency improvements
or capacity additions.
‘‘(C) The Secretary shall issue two renewable energy
credits for each kilowatt-hour of electric energy generated
and supplied to the grid in that calendar year through the
use of a renewable energy resource at an eligible facility
located on Indian land. For purposes of this paragraph,
renewable energy generated by biomass cofired with other
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fuels is eligible for two credits only if the biomass was
grown on the land eligible under this paragraph.
‘‘(D) For renewable energy resources produced from a
generation offset, the Secretary shall issue two renewable
energy credits for each kilowatt-hour generated.
‘‘(E) To be eligible for a renewable energy credit, the
unit of electric energy generated through the use of a renew-
able energy resource may be sold or may be used by the
generator. If both a renewable energy resource and a non-
renewable energy resource are used to generate the electric
energy, the Secretary shall issue credits based on the propor-
tion of the renewable energy resource used. The Secretary
shall identify renewable energy credits by type and date of
generation.
‘‘(5) When a generator sells electric energy generated
through the use of a renewable energy resource to a retail
electric supplier under a contract subject to section 210 of
this Act, the retail electric supplier is treated as the gener-
ator of the electric energy for the purposes of this section
for the duration of the contract.
‘‘(6) The Secretary may issue credits for existing facil-
ity offsets to be applied against a retail electric supplier’s
own required annual percentage. The credits are not
tradeable and may only be used in the calendar year gen-
eration actually occurs.
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‘‘(e) CREDIT TRADING.—A renewable energy credit
may be sold or exchanged by the entity to whom issued or
by any other entity who acquires the credit. A renewable
energy credit for any year that is not used to satisfy the
minimum renewable generation requirement of subsection
(a) for that year may be carried forward for use within
the next 4 years.
‘‘(f) CREDIT BORROWING.—At any time before the end
of calendar year 2005, a retail electric supplier that has
reason to believe it will not have sufficient renewable energy
credits to comply with subsection (a) may—
‘‘(1) submit a plan to the Secretary dem-
onstrating that the retail electric supplier will earn
sufficient credits within the next 3 calendar years
which, when taken into account, will enable the retail
electric supplier’s to meet the requirements of sub-
section (a) for calendar year 2005 and the subsequent
calendar years involved; and
‘‘(2) upon the approval of the plan by the Sec-
retary, apply credits that the plan demonstrates will
be earned within the next 3 calendar years to meet
the requirements of subsection (a) for each calendar
year involved.
‘‘(g) CREDIT COST CAP.—The Secretary shall offer re-
newable energy credits for sale at the lesser of 3 cents per
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kilowatt-hour or 200 percent of the average market value
of credits for the applicable compliance period. On January
1 of each year following calendar year 2005, the Secretary
shall adjust for inflation the price charged per credit for
such calendar year, based on the Gross Domestic Product
Implicit Price Deflator.
‘‘(h) ENFORCEMENT.—The Secretary may bring an ac-
tion in the appropriate United States district court to im-
pose a civil penalty on a retail electric supplier that does
not comply with subsection (a), unless the retail electric
supplier was unable to comply with subsection (a) for rea-
sons outside of the supplier’s reasonable control (including
weather-related damage, mechanical failure, lack of trans-
mission capacity or availability, strikes, lockouts, actions
of a governmental authority). A retail electric supplier who
does not submit the required number of renewable energy
credits under subsection (a) shall be subject to a civil pen-
alty of not more than the greater of 3 cents or 200 percent
of the average market value of credits for the compliance
period for each renewable energy credit not submitted.
‘‘(i) INFORMATION COLLECTION.—The Secretary may
collect the information necessary to verify and audit—
‘‘(1) the annual electric energy generation and
renewable energy generation of any entity applying
for renewable energy credits under this section,