used by the Board to provide funds to States for
the support of affordable electric service for low and
moderate income residential customers.
(2) FUNDING OF OTHER PUBLIC PURPOSE PRO-
GRAMS.—The balance of the amounts in the Fund
shall be used by the Board to provide matching
funds to States for the support of State public pur-
pose programs relating to—
(A) the impacts on employees and their
communities of any necessary reductions in the
utility workforce directly caused by electricity
deregulation. These impacts shall be mitigated
to the extent practicable through such means as
offers of voluntary severance, job retraining,
early retirement, continued health care, out-
placement and related benefits;
(B) renewable energy sources;
(C) energy conservation and efficiency; or
(D) research and development in areas de-
scribed in subparagraphs (B) and (C).
(3) DISTRIBUTION.—
(A) IN
GENERAL.—Except for amounts
needed to pay costs of the Board in carrying
out its duties under this section, the Board
shall instruct the manager of the Fund to dis-
tribute all amounts in the Fund to States to
fund public purpose programs under para-
graphs (1) and (2).
(B) FUND SHARE; UNIVERSAL ELECTRIC
SERVICE PROGRAMS.—Funds for public purpose
programs funded under paragraph (1) shall be
distributed to the States in proportion to the
State’s relative share of the Nation’s aggregate
annual consumption of electricity by low- and
moderate-income households.
(C) FUND
SHARE; OTHER
PUBLIC
PUR-
POSE PROGRAMS.—
(i) IN
GENERAL.—Subject to clause
(iii), the Fund share of a public purpose
program funded under paragraph (2) shall
be 50 percent.
(ii) PROPORTIONATE
REDUCTION.—
To the extent that the amount of matching
funds requested by States for public pur-
pose programs funded under paragraph (2)
exceeds two-thirds of the maximum pro-
jected revenues of the Fund, the matching
funds distributed to the States shall be re-
duced by an amount that is proportionate
to each State’s annual consumption of elec-
tricity compared to the Nation’s aggregate
annual consumption of electricity.
(iii) ADDITIONAL STATE FUNDING.—
A State may apply funds to public purpose
programs funded under paragraph (2) in
addition to the amount of funds applied for
the purpose of matching the Fund share.
(4) PROGRAM CRITERIA; UNIVERSAL ELECTRIC
SERVICE PROGRAMS.—
(A) ADVANCE
FUNDING
FOR
CERTIFIED
PROGRAMS.—States that implement programs
conforming to the standards set forth in this
section shall be eligible for advance funding of
such programs. The Board shall annually cer-
tify to the Secretary the compliance of State
programs with this section. The Secretary shall
provide a mechanism to ensure that universal
electric service is provided to qualifying low-in-
come consumers in States that do not have a
State program or whose State program does not
qualify for funds under this section.
(B) UNIVERSAL ELECTRIC SERVICE PRO-
GRAM
CRITERIA.—To be certified under this
section, State programs must contain the fol-
lowing provisions:
(i) Be designed and implemented to
reduce the basic electricity cost burden of
a State’s low-income households to no
more than twice the burden of a national
average of non-low-income households.
(ii) Target benefits to the most vul-
nerable households.
(iii) Be available to all households
with annual incomes at or below 150 per-
cent of the Federal poverty guidelines, or
60 percent of the median State income,
but States may determine a higher income
level as the cutoff for eligibility.
(iv) Set aside no less than 30 percent
of annual program funding for energy con-
servation and education programs provid-
ing direct efficiency services to qualifying
low-income households.
(v) Reach the maximum eligible popu-
lation, using the most cost-effective out-
reach and intake techniques.
(vi) Encourage, rather than discour-
age, energy conservation, and the prompt
payment of bills.
(vii) Spend no more than 10 percent
of program funds on administration of the
program.
(viii) The program shall be coordi-
nated with the delivery of low-income en-
ergy assistance and weatherization pro-
grams administered by State and local
agencies, making use, to the fullest extent
practicable, of existing community-based
organizations who administer one or more
fuel assistance and energy efficiency pro-
grams.
(ix) On an annual basis hold a public
hearing on the design and implementation
of such Universal Electric Service pro-
gram.
(x) Provide intervenor funding to
allow low-income consumers the oppor-
tunity to participate in State or Federal
administrative 
proceedings 
establishing,
monitoring, and overseeing the State re-
structuring plan.
(5) PROGRAM CRITERIA; OTHER PUBLIC PUR-
POSE PROGRAMS.—The Board shall recommend eli-
gibility criteria for public benefit programs funded
under paragraph (2) for approval by the Secretary.
(6) APPLICATION.—Not later than August 1 of
each year beginning in 1999, a State seeking funds
under paragraph (1) or matching funds under para-
graph (2) for the following year shall file with the
Board, in such form as the Board may require, an
application—
(A) certifying that the funds will be used
for an eligible public purpose program; and
specifying what funds are requested and for
programs under which paragraph; and
(B) stating the amount of State funds ear-
marked for the programs, and to be used for
any required matching.
(c) WIRES CHARGE.—
(1) DETERMINATION OF NEEDED FUNDING.—
Not later than August 1 of each year, the Board
shall determine and inform the Commission of the
aggregate amount of wires charges that it will be
necessary to have paid into the Fund to pay match-
ing funds to States and pay the operating costs of
the Board in the following year.
(2) IMPOSITION OF WIRES CHARGE.—
(A) IN GENERAL.—Not later than Decem-
ber 15 of each year, the Commission shall im-
pose a nonbypassable wires charge to be paid
directly into the Fund by the operator of the
wire on electricity carried through the wire, this
electricity to be measured as it exits the busbar
at a generation facility, and which impacts on
interstate commerce.
(B) AMOUNT.—The wires charge shall be
set at a rate equal to the greater of—
(i) 7 mills per kilowatt-hour; or
(ii) a rate that is estimated to result
in the collection of an amount of wires
charges that is as nearly as possible equal
to the amount of needed funding deter-
mined under paragraph (1).
(3) DEPOSIT IN THE FUND.—The wires charge
shall be paid by the operator of the wire directly into
the Fund at the end of each month during the cal-
endar year for distribution by the public benefit
manager.
(4) PENALTIES.—The Commission shall assess
against a wire operator that fails to pay a wires
charge as required by this subsection a civil penalty
in an amount equal to triple the amount of the un-
paid wires charge.
(d) AUDITING.—
(1) IN GENERAL.—The Fund shall be audited
annually by a firm of independent certified public
accountants in accordance with generally accepted
auditing standards.
(2) ACCESS TO RECORDS.—Representatives of
the Secretary and the Commission shall have access
to all books, accounts, reports, files, and other
records pertaining to the Fund as necessary to fa-
cilitate and verify the audit.
(3) REPORTS.—
(A) IN GENERAL.—A report on each audit
shall be submitted to the Secretary, the Com-
mission, and the Secretary of the Treasury, who
shall submit the report to the President and
Congress not later than 180 days after the
close of the fiscal year.
(B) REQUIREMENTS.—An audit report
shall—
(i) set forth the scope of the audit;
and
(ii) include—
(I) a statement of assets and li-
abilities, capital, and surplus or defi-
cit;
(II) a statement of surplus or
deficit analysis;
(III) a statement of income and
expenses;
(IV) any other information that
may be considered necessary to keep
the President and Congress informed
of the operations and financial condi-
tion of the Fund; and
(V) any recommendations with
respect to the Fund that the Sec-
retary or the Commission may have.
SEC. 115. RENEWABLE ENERGY PORTFOLIO STANDARDS.
(a) MINIMUM RENEWABLE GENERATION REQUIRE-
MENT.—(1) By March 22 of each calendar year after
2000, each retail electricity supplier shall submit to the
Secretary renewable energy credits in an amount equal to
the required annual percentage of the supplier’s total kilo-
watt-hour sales to end-use customers in the preceding cal-
endar year.
(2) Nothing in this section shall be construed to pro-
hibit any State from requiring additional renewable energy
generation in that State under any program adopted by
the State. A State may limit the benefits of any State re-
newable energy program to renewable energy generators
located within the State’s boundaries.
(b) REQUIRED ANNUAL PERCENTAGE.—For end-use
customer sales in calendar year 2000, the required annual
percentage for each retail electricity supplier shall be set
equal to the amount of renewable energy in the United
States as of December 1997, and shall be known as the
‘‘baseline.’’ The Secretary shall establish this baseline by
rule based on an advance registration process for renew-
able energy credits or by conducting a survey of renewable
energy generation plants. Such baseline shall be estab-
lished after notice and opportunity for hearing but not
later than 180 days after the enactment of this Act.
Thereafter the required annual percentage for each such
supplier shall increase as set forth in the following table:
Calendar year:
Minimum Percentage Increase
(cumulative):
2001 ......................................................................................... baseline plus
0.50%
2002 ......................................................................................... baseline plus
1.00%
2003 ......................................................................................... baseline plus
1.50%
2004 ......................................................................................... baseline plus
2.00%
2005 ......................................................................................... baseline plus
3.00%
2006 ......................................................................................... baseline plus
4.00%
2007 ......................................................................................... baseline plus
5.00%
2008 ......................................................................................... baseline plus
6.00%
Calendar year:
Minimum Percentage Increase
(cumulative):
2009 ......................................................................................... baseline plus
7.00%
2010 ......................................................................................... baseline plus
8.00%
2011 and beyond ......................................................................
1.00%
additional to
the previous
year
(c) SUBMISSION OF CREDITS.—An electric generator
may satisfy the requirements of subsection (a) through the
submission, by March 22 of the year following each cal-
endar year, of renewable energy credits issued by the Sec-
retary under this section for renewable energy generated
in such calendar year or the previous calendar year. A re-
newable energy credit that is submitted to the Secretary
may not be used for any other purposes thereafter.
(d) ISSUANCE OF RENEWABLE ENERGY CREDITS.—
(1) IN GENERAL.—The Secretary shall estab-
lish, by rule after notice and opportunity for hearing
but not later than 120 days after the enactment of
this Act, a program to issue renewable energy cred-
its to renewable energy electric generators that sell
electricity to any other person. Renewable energy
credits shall be identified by type of generation and
State where the generator is located. Under such
program, the Secretary shall issue one renewable en-
ergy credit to any person who generates and sells to
any other person one kilowatt-hour of renewable en-
ergy net of any on-site consumption.
(2) FEES.—The Secretary shall impose and col-
lect a fee on electric generators awarded renewable
energy credits in an amount equal to the reasonable
costs of administering the Renewables Portfolio
Standard program established under this section
which shall be due at the time such credits are
issued.
(3) PURPA CONTRACTS.—In the case of re-
newable energy sold by the renewable energy electric
generator at above-market rates to a State regulated
electric utility under a contract entered into before
the date of enactment of this Act that is subject to
section 210 of the Public Utility Regulatory Policies
Act of 1978, for the duration of such contract, the
utility shall be treated for purposes of the other pro-
visions of this section as the generator of such en-
ergy unless such generator and utility agree to ter-
minate such contract prior to the expiration date set
forth in the contract. The Secretary shall settle any
disputes regarding the calculation of above-market
rates as it pertains to this section.
(e) SALE OR EXCHANGE.—Renewable energy credits
may be sold or exchanged by the person to whom issued
or by any other person who acquires the credit. A renew-
able energy credit generated in 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 in the following year, but may not be carried forward
for use in any subsequent year.
(f) RULES AND REGULATIONS.—(1) The Secretary
shall promulgate such rules and regulations as may be
necessary to carry out this section, including but not lim-
ited to such rules and regulations requiring the submission
of such information as may be necessary to verify renew-
able energy generation by persons applying for renewable
energy credits under subsection (d), total end-use cus-
tomer sales of any person submitting renewable energy
credits for compliance under subsection (a), and to vali-
date the renewable energy credits submitted by any person
to the Secretary.
(2) At the request of any State, the Secretary shall
develop administrative procedures and promulgate addi-
tional rules and regulations as necessary to facilitate joint
implementation of the national renewables portfolio stand-
ard and any renewables portfolio standard adopted by any
State pursuant to subsection (a)(2).
(g) ANNUAL REPORTS.—The Secretary shall gather
available data and devise measures to gauge compliance
with the requirements of this section and the success of
the Renewables Portfolio Standard program established
under this section. On an annual basis not later than May
31 of each year, the Secretary shall publish a report for
the previous year that includes compliance data, program
results, and steps taken to improve the program results.
(h) SUNSET.—The requirements of this section shall
cease to apply 90 days after the Secretary certifies in the
annual report under subsection (g) that for the preceding
year the market value of renewable energy credits or the
number of credits traded or both has declined to such
nominal levels that the administrative cost to implement
the program is no longer justified.
(i) ENFORCEMENT.—(1) The failure or refusal of any
person to submit any required quantity of renewable en-
ergy credits shall be subject to a civil penalty of 3 times
the estimated national average market value (as deter-
mined by the Secretary) for the calendar year concerned
of such quantity of renewable energy credits. Any such
penalty shall be due and payable without demand to the
Secretary as provided in regulations to be issued by the
Secretary pursuant to subsection (f). Any such payment
shall be deposited in the United States Treasury pursuant
to the Miscellaneous Receipts Act. Any penalty due and
payable under this section shall not diminish the liability
of the unit’s owner or operator for any fine, penalty or
assessment against the unit for the same violation under
any other section of this Act.
(2) The Secretary shall bring an action in the appro-
priate United States district court to impose a civil penalty
on any person who fails or refuses to comply with sub-
section (a) or who fails to pay such penalty.
SEC. 116. NET-METERING AND INTERCONNECTION STAND-
ARDS.
The Public Utility Regulatory Policies Act of 1978
is amended by adding the following new section after sec-
tion 604:
‘‘SEC. 605. NET-METERING FOR RENEWABLE ENERGY.
‘‘(a) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘eligible on-site generating facil-
ity’ means a facility on the site of an electric con-
sumer with a peak generating capacity of 2
megawatts or less that is fueled solely by a renew-
able energy resource.
‘‘(2) The term ‘renewable energy resource’
means organic waste biomass (not including munici-
pal solid waste of black liquor), dedicated biomass
energy crops, landfill gas, geothermal, solar, or wind
resources.
‘‘(3) The term ‘net-metering service’ means a
service to an electricity consumer under which elec-
tricity generated by that consumer from an eligible
on-site generating facility and delivered to the dis-
tribution system through the same meter through
which purchased electricity is received may be used
to offset electricity provided by the retail electricity
supplier to the consumer during the applicable bill-
ing period so that a consumer is billed only for the
net electricity consumed during the billing period. If
the net electricity consumed is less than zero, then
the consumer shall be paid during the next billing
period the average spot market price for the elec-
tricity generated.
‘‘(b) REQUIREMENT TO PROVIDE NET METERING
SERVICE.—Each retail electricity supplier shall make
available upon request net metering service to any retail
consumer whom the supplier currently serves or solicits
for service.
‘‘(c) REQUIREMENT TO PROVIDE INTERCONNEC-
TION.—A retail electricity distributor shall permit the
interconnection to its distribution system of an on-site
generating facility if the facility meets the safety and
power quality standards established by the Commission.
‘‘(d) RULES.—The Commission shall prescribe safety
and power quality standards and rules necessary to carry
out this section. These standards and rules apply to any
interconnections of an on-site generating facility with a
distribution system, regardless of the size of the facility
or the type of fuel used by the facility.’’.
SEC. 117. CIVIL LIABILITY.
(a) LIABILITY.—A person who fails to abide by the
requirements of this Act with respect to any person is lia-
ble to such person in the amount of—
(1) any actual damage sustained by such person
as a result of such failure;
(2) an amount not less than $100 nor more
than $1,000 per violation; and
(3) in the case of any action to enforce this sec-
tion, the costs of the action, together with reason-
able attorneys fees as determined by the court.
(b) COURT ACTION.—Any action under this section
may be brought in any United States District Court, or
in any other court of competent jurisdiction, within three
years from the date of violation.
(c) ACTIONS TO ENFORCE.—An action to enforce
this Act may also be brought by any State Attorney Gen-
eral of any other agency responsible for its enforcement.
TITLE II—STATE STANDARDS
FOR ELECTRICITY SERVICE
SEC. 201. RETAIL DEREGULATION.
(a) PRIOR DEREGULATION.—If a State has enacted
laws or regulations to deregulate retail sales of electricity
prior to the effective date of this Act, a State shall meet
the requirements of sections 202 and 205 through 216
inclusive within 2 years after the effective date of this Act.
(b) FUTURE DEREGULATION.—For States that con-
tinue to regulate retail sales of electricity after the effec-
tive date of this Act, a State shall meet the requirements
of sections 202 and 205 through 216 inclusive before en-
acting laws or regulations that deregulate retail sales of
electricity.
SEC. 202. PROHIBITION OF COST SHIFTING.
(a) RATES.—No class of consumers in a State shall
be charged rates for transmission or distribution service
(or other regulated services) in excess of the class’s pro-
portional responsibility for the costs of providing these
services.
(b) RATE DIFFERENTIAL.—On an annual basis, each
State regulatory authority shall compute the rate differen-
tial for retail electric service between residential and in-
dustrial customers by comparing the total average residen-
tial rate and the total average industrial rate, based on
monthly reports by suppliers to the State regulatory au-
thority and the Energy Information Administration. As
used in this subsection, ‘‘total average residential rate’’
means the total residential revenues divided by the total
residential kilowatt-hour sales; ‘‘total average industrial
rate’’ means the total industrial revenues divided by total
industrial kilowatt-hour sales; and ‘‘rate differential’’
means the difference between the total average residential
rate and the total average industrial rate, divided by the
total average residential rate.
(c) THREE PERCENT DIFFERENTIAL.—If the State
regulatory authority determines that the rate differential
for electric service between residential and industrial cus-
tomers has increased by three percentage points or more
from the rate differential that existed on the day before
the State enacted laws or regulations to deregulate retail
sales of electricity, the State regulatory authority shall
order each distributor to increase the access charge per
kilowatt-hour to all industrial customers, and to reduce
the access charge per kilowatt-hour to all residential cus-
tomers, so that the rate differential remains within three
percentage points or less of the rate differential that ex-
isted on the day before the State enacted laws or regula-
tions to deregulate retail sales of electricity.
SEC. 203. PROHIBITION OF AFFILIATE ABUSES AND CROSS-
SUBSIDIES.
(a) TRANSFER OF ASSETS.—Within 1 year after a
State has enacted laws or regulations to deregulate retail
sales of electricity, the State’s investor-owned utilities
shall—
(1) transfer transmission assets to a regulated
transmission company; and
(2) transfer the distribution assets to a regu-
lated distribution company.
(b) DEFINITIONS.—For the purposes of this section,
the terms ‘‘transmission company’’ and ‘‘distribution com-
pany’’ mean transmission companies and distribution com-
panies created to comply with subsection (a).
(c) PROHIBITION.—It shall be unlawful for any per-
son who owns directly or indirectly any voting security of
any company that owns, operates, or leases generation fa-
cilities, or for any person who owns directly or indirectly
any voting security of any company that sells electricity
in wholesale or retail markets, to own directly or indirectly
any portion of a transmission company or a distribution
company.
(d) OFFICERS, DIRECTORS, EMPLOYEES.—It shall be
unlawful for any officer, director, or employee of a trans-
mission company or a distribution company to have any
affiliation with, or to own any security of any company,
or any associated company thereof, that owns, operates,
or leases generation facilities, or that sells electricity in
wholesale or retail markets.
(e) OWNERSHIP OF SECURITIES.—It shall be unlaw-
ful for any transmission company or any distribution com-
pany to own directly or indirectly any security of any other
company.
(f) LOANS.—It shall be unlawful for any transmission
company or any distribution company to borrow from any
company, or any associated or affiliated company thereof,
that owns, operates, or leases generation facilities, or that
sells electricity in wholesale or retail markets.
(g) LOANS FROM TRANSMISSION OR DISTRIBUTION
COMPANIES.—It shall be unlawful for any person to bor-
row from any transmission company or any distribution
company.
(h) SERVICE, SALES, OR
CONSTRUCTION
CON-
TRACTS.—It shall be unlawful for any transmission com-
pany or any distribution company to enter into any serv-
ice, sales, or construction contract with any company, or
any associated or affiliated company thereof, that owns,
operates, or leases generation facilities, except for the pro-
vision of generation services that allow for the safe, reli-
able, and economical operation of a transmission system
or a distribution system as determined through the use
of the principles of distributed resources.
(i) USE OF NAMES, ETC.—It shall be unlawful for
any transmission company or any distribution company to
use, or to resemble in anyway, the name, logo, service
mark, trademark, or trade name of any company, or any
associated company thereof, that owns, operates, or leases
generation facilities, or that sells electricity in wholesale
or retail markets.
(j) ADDITIONAL PROHIBITIONS.—An investor-owned
electric utility, a transmission company, and a distribution
company—
(1) may not discriminate against any other per-
son or company in the provision of goods, services,
facilities, and information, or in the establishment of
standards;
(2) shall provide all goods, services, facilities, or
information, including marketing leads, to all other
persons on reasonable and nondiscriminatory terms
and conditions; and
(3) shall not provide, transfer, or permit the
use of, or access to, tangible or intangible assets of
the investor-owned electric utility, transmission com-
pany, or distribution company.
SEC. 204. PROHIBITION OF EXCESSIVE GENERATION MAR-
KET POWER.
(a) IN GENERAL.—Within 1 year after a State has
enacted laws or regulations to deregulate retail sales of
electricity, it shall be unlawful for any investor-owned gen-
eration company, or associated holding company or sub-
sidiary thereof, or an affiliated company, to own, operate,
lease, or otherwise control more than 20 percent of the
State’s power plants within the following categories:
(1) Baseload power plants, defined as power
plants with a capacity factor greater than or equal
to 50 percent.
(2) Peaking power plants; defined as power
plants with a capacity factor less than 50 percent.
(3) Power plants that primarily provide ancil-
lary services, including without limitation, load-fol-
lowing, spinning reserve, replacement reserves, fre-
quency regulation, and voltage regulation.
(b) LOAD POCKETS.—If transmission constraints
create load pockets within a State, then subsection (a) ap-
plies to the ownership, operation, or leasing of power
plants located within each load pocket.
SEC. 205. BASIC SERVICE.
(a) IN GENERAL.—A distributor shall arrange for the
provision of basic service to any residential and small com-
mercial customer who has not chosen a supplier after hav-
ing been notified of their opportunity to do so, and those
whose supplier has failed or refused to provide further
service to the customer. A distributor may arrange for the
provision of basic service to any other customer upon re-
quest and upon mutually agreeable terms. The distributor
shall automatically provide basic service to any customer
whose supplier has failed or refused to provide service to
that customer unless the customer has given instructions
to either disconnect service or switch to a different sup-
plier.
(b) BIDS.—The distributor shall annually solicit com-
petitive bids for the provision of basic service from all sup-
pliers licensed to do business in the State. If three or more
suppliers submit proposals that meet the minimum terms
contained in the bid document, the distributor shall accept
the bid that best meets the terms of the bid requirements
and offers the lowest price for electricity. If there are less
than three suppliers submitting proposals meeting mini-
mum terms, the State regulatory authority shall approve
the price for basic service prior to the award of any bid
by the distributor.
(c) TERMS.—The distributor shall include the follow-
ing terms in the solicitation for proposals for provision of
basic service:
(1) The supplier shall provide customers with a
choice between a price for electricity which does not
vary by time of day or season and a price that varies
by time of day and season.
(2) There shall be no administrative fee or
extra charge for a customer to obtain basic service.
There shall be no fee charged for any customer when
the service is provided as a result of a supplier’s fail-
ure or refusal to serve a customer.
(3) The current rules in effect governing credit
and collection activities, deposits, disconnection, late
fees, reconnection fees, winter disconnection rules or
other restrictions on disconnection for vulnerable
customers, payment arrangements, medical emer-
gencies and other customer protections shall be ap-
plicable to basic service.
(4) The distributor shall bill and collect for
basic service charges, and the supplier shall reim-
burse the distributor an agreed-upon amount to re-
flect the costs avoided by the supplier due to this ar-
rangement. The costs of basic service in excess of
the revenues received, including any costs incurred
to collect overdue amounts, shall be included in the
rates charged by the distributor to all its customers.
SEC. 206. AGGREGATION OF CONSUMERS.
(a) POWERS
OF CONSUMERS.—(1) A State shall
allow consumers to establish options for nonprofit public
aggregation. A State shall allow consumers to utilize a tra-
ditional public process at the local level to authorize public
aggregation in the form of new municipal electric systems;
franchise contracts; community choice aggregation; coop-
erative buying clubs in unincorporated areas.
(2) A State shall not diminish, restrict, or otherwise
render ineffective the process or ability of consumers to
establish or conduct public aggregation options. State reg-
ulatory bodies are to work cooperatively with local govern-
ments to enhance the process for carrying out the provi-
sions of subsections (b), (c), (d), (e), (f), (g), and (h)
below.
(b) MUNICIPALIZATION.—A State shall facilitate the
opportunities for consumers to establish new nonprofit
municipal electric systems. Such facilitation shall include
an arbitration process for asset valuation at original cost
minus depreciation. Existing municipal electric systems
and existing rural electric cooperative systems, as self-reg-
ulated by consumers, are to be exempted from all provi-
sions of this section.
(c) FRANCHISE CONTRACT.—A State shall facilitate
the ability of consumers to utilize local franchise powers.
A State shall allow municipalities or counties that have
granted franchises to utilities at a prior time, whether the
term of such franchise has expired or remains in effect,
to offer such franchise for competitive bidding and con-
tract award, provided such measures are authorized by
consumers in a public process. Such franchises may con-
tain terms to address combined distribution and power
supply, or any segment of operations for retail electricity
service.
(d) COMMUNITY CHOICE AGGREGATION.—A State
shall allow consumers the option to establish nonfranchise
aggregation of all consumers through their local govern-
ment. Municipalities or counties shall be allowed to pass
ordinances to undertake public aggregation of all classes
of consumers, provided such measures are authorized by
consumers in a public process. To accommodate those who
may not wish to participate, at local discretion, the aggre-
gation structure may include a process for individual con-
sumers to ‘‘opt-out’’ during a defined time period. Com-
munity choice aggregation may address competitive bid-
ding and contract award for power supply only, or addi-
tional services related to electric supply.
(e) BUYING COOPERATIVES
IN UNINCORPORATED
AREAS.—Consumers in unincorporated areas without the
benefit of organized local governments shall be allowed to
combine their buying power in cooperative organizations;
provided such organizations are nonprofit and nondiscrim-
inatory.
(f) ENERGY EFFICIENCY FUNDS.—If a State author-
izes or mandates collection of funds for energy efficiency
programs, consumers who establish aggregation through
a public process can recover and utilize funds collected
from consumers within the aggregated jurisdiction. A plan
for utilization of such funds is to be prepared and subject
to approval at the local level, then submitted to State reg-
ulators for review of consistency with State energy goals.
(g) RENEWABLE ENERGY FUNDS.—If a State au-
thorizes or mandates collection of funds for renewable en-
ergy education, support, or development, consumers who
establish aggregation through a public process can recover
and utilize funds collected from consumers within the ag-
gregated jurisdiction. A plan for utilization of such funds
is to be prepared and subject to approval at the local level,
then submitted to State regulators for review of consist-
ency with State energy goals.
(h) CONVERGENCE
OF UTILITY SERVICES.—If a
State authorizes retail marketing of combined ‘‘wires’’ or
energy services such as cable television, Internet, natural
gas, electricity, telephone, and other related technologies,
an entity established by consumers through a public proc-
ess shall be allowed to combine any and all services
deemed appropriate for provision to the aggregated con-
sumers.
SEC. 207. WORKER PROTECTIONS.
(a) RECOVERY OF COSTS.—Electric utilities shall be
allowed to recover reasonable employee-related transition
costs incurred and projected for programs that provide for
offers of voluntary severance, job retraining, early retire-
ment, continued health care, outplacement and related
benefits. However, there shall be no recovery for employee-
related transition costs associated with officers and senior
supervisory employees performing predominantly regu-
latory functions.
(b) UNEMPLOYMENT BENEFITS.—States should con-
sider extended unemployment benefits to any employee of
an electric utility company who is terminated through no
fault of his own as a result of electricity deregulation and
is otherwise eligible for unemployment benefits. No such
employee shall be denied or be determined to be ineligible
for any such benefits if the employer has provided notice
of the cessation of employment.
(c) PLAN.—Before any such reduction in the work-
force, an electric utility shall present to its employees and
their representatives a workforce reduction plan outlining
the means by which the electric utility intends to mitigate
the impact of such workforce reduction on its employees.
SEC. 208. LICENSING AND DISCLOSURE REQUIREMENTS
FOR RETAIL SUPPLIERS.
(a) PURPOSE.—The purpose of this section is to es-
tablish the jurisdiction of the State regulatory authority
over retail electricity suppliers and to set forth the condi-
tions under which such suppliers may obtain a license to
sell retail electricity in a State.
(b) LICENSE.—No retail electricity supplier shall en-
gage in the business of the sale, marketing, brokering, or
aggregating for the sale of electricity in a State without
a valid license from the State regulatory authority. All re-
tail electric suppliers who seek to do business in a State
shall file an application with the State regulatory author-
ity that includes the following information:
(1) Legal name.
(2) Business address.
(3) That State where incorporated; date or or-
ganization; copy of the articles of incorporation, as-
sociation or other form of organization.
(4) Names and business address of all officers
and directors, partners; or other similar officials.
(5) Name, title, and telephone number of cus-
tomer service contact person.
(6) Name, title, and telephone number of regu-
latory contact person.
(7) Name, title, and address of registered agent
in this State for service of process.
(8) Description of the nature of the business to
be conducted, a map showing the geographic area of
the supplier’s intended marketing area, and a list of
any restrictions on the type or number of customers
the supplier will seek to serve.
(9) Evidence of the supplier’s right, title, or in-
terest in generation supplies sufficient to meet the
existing and projected demands of its customers.
(10) A copy of the standard contract proposed
to be used by the supplier for residential and small
commercial customers.
(11) Whether the applicant or any member of
its board of directors or officers have been or are the
subject of State or Federal investigation, license rev-
ocation or lawsuit, and, if so, the identification of
such States and proceedings.
(12) Proof of holding a bond or other evidence
of insurance approved by the State regulatory au-
thority in the amount reflecting number of cus-
tomers served and the amount of electricity sold.
The bond must be updated annually on the anniver-
sary of the approval of the license, based on the sup-
plier’s average number of customers and the amount
of electricity sold. The bond shall carry an endorse-
ment that shall allow the issuer of the bond or in-
surer to pay such amounts and in such a manner as
ordered by the State regulatory authority upon a
finding of fraudulent conduct toward consumers, ac-
tions which cause the electricity supply system to be-
come unreliable, revocation of the supplier’s license,
abandonment by the supplier, or, upon complaint, a
failure to comply with the settlement’s contract with
the distributor. The State regulatory authority may
order the bond proceeds to be paid to customers as
restitution for fraudulent conduct, violation of State
law or State regulatory authority rule, or to other
individuals adversely affected by the supplier’s con-
duct.
(c) APPROVAL.—The application shall be deemed ap-
proved after 90 days, unless the State regulatory authority
initiates an adjudicatory proceeding by public notice that
states the reason(s) why there is reason to believe that
the application should be denied. The applicant shall have
an opportunity to correct any deficiency noted by the State
regulatory authority in writing or request a public hearing.
A failure to comply with the application requirements or
evidence that indicates a pattern of violation of State or
Federal consumer protection laws and rules, including
antitrust laws and securities rules, shall be sufficient to
deny an application. A license shall remain valid for a pe-
riod of five years unless sooner revoked.
(d) CHARGES.—After a license is issued, a retail elec-
tricity supplier must inform the State regulatory authority
in writing of any substantial change in the information
submitted to obtain a license from the State regulatory
authority within ten days of the event. The failure to pro-
vide such information in a timely manner shall be grounds
for revocation of the license.
(e) REVOCATION.—The State regulatory authority
may revoke a license for the retail sale of electricity for
cause after opportunity for public hearing. The State reg-
ulatory authority may issue an order that prevents a sup-
plier from marketing or signing up new customers during
the pendency of an investigation or revocation proceedings
when it finds that there is probable cause to believe that
consumers will be harmed or that the reliability of the elec-
tricity supply of a State will be harmed by the actions of
the supplier.
(f) OBLIGATIONS TO DISTRIBUTION COMPANIES.—A
retail electricity supplier shall enter into a contract with
each distributor that services its customers. The contract
shall describe the billing arrangements between the dis-
tributor and the supplier, how information concerning cus-
tomer status will be transmitted between the two entities,
whether and under what conditions upstream metering
will occur to facilitate settlements of nonhourly metered
customers and other settlement issues. The contract shall
be filed with the State regulatory authority by the retail
electric supplier prior to the commencement of business
by the supplier in this State.
(g) DISCLOSURE
OF UNIVERSAL SERVICE PRO-
GRAMS.—A retail electric supplier shall inform every pro-
spective customer of the availability of universal service
programs for qualified customers and how customers can
apply for such programs. A summary of such programs
shall be provided in writing within ten days of commence-
ment of service for residential customers.
(h) STATE REGULATORY AUTHORITY ACCESS
TO
BOOKS
AND RECORDS; INVESTIGATIONS; FINES.—The
State regulatory authority shall have access to a retail
electric supplier’s books and records concerning its busi-
ness within this State upon reasonable notice in order to
investigate, upon reasonable cause, any alleged violation
of this Act. The supplier shall make such books and
records available to the State regulatory authority within
this State at a location convenient to both parties. Upon
reasonable cause, the State regulatory authority may initi-
ate an investigation of the supplier’s business in this State
for the purpose of determining compliance with any provi-
sion of this Act. Upon initiating such investigation, the
State regulatory authority shall notify the supplier and
other interested parties and take such steps as are nec-
essary and proper to protect the confidentiality of infor-
mation obtained from suppliers that would unfairly impact
the supplier’s ability to attract future sales of electricity
in this State. The State regulatory authority shall offer
the supplier an opportunity to respond and request a pub-
lic hearing. Upon a finding that the supplier has violated
one or more provisions of this Act, the State regulatory
authority may issue such orders as necessary, pursue a
revocation of the supplier’s license, order restitution to
specific customers, and assess fines according to section
216 of this Act.
SEC. 209. REGULATION OF DISTRIBUTION COMPANIES.
(a) DISTRIBUTION SYSTEM.—The distributor shall be
required to retain its monopoly role with respect to the
construction and maintenance of the distribution system
for all customers, installation of service and meter read-
ing, billing of customers for distribution and transmission
services, and provision of optional billing services under
contract with retail electricity suppliers. The distributor
shall provide access to the electric grid in a nondiscrim-
inatory manner to customers, be subjected to regulation
of the State regulatory authority for prices and the quality
of its customer service, and undertake such additional ob-
ligations with respect to energy efficiency and universal
access services as determined by the State regulatory au-
thority. The purpose of this subsection is to supplement
existing law and, where appropriate, substitute rights and
obligations for distribution companies in an electricity
market characterized by retail deregulation.
(b) 
UNBUNDLED
RATES.—A 
distributor 
shall
unbundle or separate its charges for distribution and
transmission services into the following components:
(1) Transmission services.
(2) Distribution services, which shall include
the costs associated with universal service programs
and energy efficiency programs or expenses author-
ized by the State regulatory authority, bad debt and
other expenses associated with consumer protection
provisions.
(3) Charges for electricity supplied by a retail
electricity supplier or basic service arranged by the
distributor.
(c) CUSTOMER RIGHT OF ACCESS; DUTY OF DIS-
TRIBUTOR.—A distributor shall provide access to the elec-
tric grid in a nondiscriminatory manner to any person
upon request. Any condition imposed by the distributor
prior to providing access shall be contained in the compa-
ny’s terms and conditions subject to review by the State
regulatory authority. The procedures adopted by the dis-
tributor to provide access to retail electric suppliers shall
include the following requirements:
(1) A distributor must offer to enter into an
agreement to govern metering, meter reading, trans-
mittal of billing information or billing services, and
settlement of accounts with any retail electric sup-
plier licensed by the State regulatory authority. The
retail supplier shall provide at least two weeks notice
to the distributor of its intent to do business in the
service territory of the distributor. The agreement
between the distributor and the retail electric sup-
plier must incorporate the provisions relating to the
funding and delivery of basic service programs; im-
plementation of the State regulatory authority’s re-
quirements relating to credit and collection; bill noti-
fication and disclosure requirements; and notifica-
tion between customers, suppliers, and the distribu-
tor of intent to change suppliers or obtain reconnec-
tion and disconnection services. A copy of the agree-
ment shall be filed with the State regulatory author-
ity but shall not require State regulatory authority
approval.
(2) No distributor shall discriminate against or
show favor toward any retail electric suppliers in its
communications or in its course of conduct with cus-
tomers or retail electric suppliers.
SEC. 210. CHANGE OF SUPPLIER.
(a) IN GENERAL.—A customer may change his or her
electric supplier at any time, subject to any penalty set
forth in the contract with the supplier. The distributor
may charge a reasonable fee to make a change in the cus-
tomer’s supplier to reflect the actual cost to read the cus-
tomer’s meter and make changes in its billing records, ex-
cept that every customer may seek to obtain basic service
as described in section 205 without charge. When a fee
is applicable, the distributor shall offer the customer the
option to self-read the meter or provide a timely meter
reading at a lower cost.
(b) NOTIFICATION.—Except for the automatic provi-
sion of basic service, a distributor shall not change the
identity of the customer’s supplier if there is any reason
to believe that the notification procedures of section 213
have been violated. Instead, the distributor shall take im-
mediate steps to attempt to communicate directly with the
customer.
(c) NOTICE PERIOD.—A distributor may adopt a rea-
sonable notice period to effectuate a customer’s change of
supplier, but this notice period shall not be greater than
three business days. The distributor shall read the cus-
tomer’s meter or obtain a self-reading from the customer
prior to recording a change in the customer’s supplier.
(d) METER.—Any change in the customer’s supplier
shall take effect at the time of the meter reading by the
distributor, or, if an actual meter reading is not possible
after reasonable efforts to obtain an actual or customer-
supplied reading by the distributor, on midnight of the day
that the change is implemented by the distributor in its
records.
SEC. 211. DISTRIBUTION SERVICE DISCONNECTIONS AND
SUPPLY TERMINATIONS.
(a) DISCONNECTION.—All customers shall be pro-
tected from unreasonable distribution service disconnec-
tions and unreasonable supply terminations.
(b) DEFINITION.—Unreasonable distribution service
disconnection includes, without limitation, disconnection
from access—
(1) for failure to pay a seller other than the
seller of basic service; or
(2) in the case of qualified low-income house-
holds receiving basic service, before they—
(A) have been referred to social service
agencies that can provide them with assistance;
and
(B) have failed to pay under an extended
payment agreement; or
(3) when such disconnection would be dan-
gerous to the health or safety of a member of the
household, including during the presence of infants,
elders, disabled persons, and during risk of extreme
weather conditions. For the purposes of this section,
the term ‘‘infant’’ means any child under six years
of age, the term ‘‘elder’’ means any person 60 years
of age or older, and the term ‘‘disabled person’’ has
the same meaning as provided in the Americans with
Disabilities Act; or
(4) without contacting a third party designated
by such household to receive notice of proposed serv-
ice disconnection.
(c) PROHIBITION.—A seller shall not disconnect or
threaten to disconnect the customer’s electric service or
to terminate the customer’s electricity supply for failure
to pay for products or services other than electricity.
(d) PROTECTION.—All customers shall be protected
from unreasonable supply termination, including without
limitation—
(1) termination before adequate notice is pro-
vided of the supplier’s intent to terminate, and of
the right to continue service via another supplier
provider or through basic service; or
(2) when used as a mechanism for bill collection
or during the pendency of a dispute regarding bill
amount.
(e) NOTICE.—A supplier may discontinue services to
a customer who fails to pay or make a reasonable payment
arrangement for an overdue amount in excess of $50 by
giving notice to both the customer and the distributor. The
notice shall be in writing and conspicuously disclose the
amount overdue, what the customer must do to avoid dis-
continuance of service, how the customer can contact the
supplier to negotiate terms to avoid disconnection, and
how the customer can obtain basic service in place of fur-
ther service from the supplier. The notice shall be mailed
or delivered at least ten weekdays prior to disconnection
of service. Once the due date has passed, the supplier may
notify the distributor who shall change the customer’s sup-
plier upon proper notice from the customer or initiate
basic service within three business days. The supplier’s ob-
ligation to the distributor or network operator shall cease
with the disconnection of service by the distributor, the
initiation of basic service or the commencement of service
to the customer by a different supplier, whichever comes
first.
(f) TENANTS.—A tenant whose landlord fails to pay
for electric service shall not be disconnected from distribu-
tion service or from electricity supply. Where metering fa-
cilities exist, the tenant shall be offered an opportunity
to put service, including basic service, in his or her name.
In addition to any other remedy authorized by law, a retail
supplier and distributor may file a lien on the property
of any owner of a multi-unit, single-metered building for
failure to pay for electricity services. This lien shall be
filed in the same manner and perfected with the same pro-
cedures as those available to towns and cities for the col-
lection of unpaid property taxes and sewer charges.
(g) PHYSICIANS.—The distributor shall notify all its
customers of the right to have a registered physician de-
clare a medical emergency in the household and avoid dis-
connection for a period not to exceed 90 days. If a dis-
tributor receives such a declaration, it shall promptly no-
tify the customer’s supplier. Upon receipt of a declaration
of medical emergency, a retail supplier shall not dis-
connect the customer. During this time period the cus-
tomer may request basic service or continue with service
from his or her retail supplier. During this time period
the customer may not be threatened with disconnection
and the supplier and distributor shall accept less than pay-
ment in full. The customer shall remain liable for all un-
paid amounts. At the end of a maximum period of 90
days, the customer shall either resume regular payments
or pay the overdue amount in full to avoid disconnection.
SEC. 212. CREDIT AND COLLECTION PRACTICES.
(a) STATE REGULATIONS.—A State authority’s cur-
rent credit and collection regulations shall remain in effect
to govern the actions of a distributor with regard to basic
service and the billing and collection of distribution and
transmission services provided by the distributor and other
companies.
(b) BILLING AND COLLECTION.—The following pro-
visions apply to the billing and collection for the sales of
electricity by retail suppliers and the billing and collection
for sales of electricity by distributors under contract with
suppliers:
(1) A distributor that offers to bill for suppliers
shall allocate a customer’s partial payment first to
services regulated by the State regulatory authority,
including without limitation, distribution and trans-
mission services, and then to the unregulated portion
of the bill. For purposes of this paragraph, the term
‘‘services regulated by the State regulatory author-
ity’’ includes energy management and efficiency
services provided to the customer pursuant to an
order of a State regulatory authority and billed by
the distributor.
(2) A retail supplier shall not refuse to grant
credit to any applicant based on a prohibited basis
contained in the Federal Equal Credit Opportunity
Act, 15 U.S.C. 1691–1691f.
(3) Any deposit required by a retail supplier
shall not exceed the applicant’s estimated bill for a
two-month period. The State regulatory authority
may waive the supplier’s right to a deposit in any
case in which it finds that the supplier has discrimi-
nated in its request for a deposit from an applicant.
The State regulatory authority may take into ac-
count the supplier’s written credit and collection pro-
cedures and their application in making this deci-
sion. A request for a deposit shall be in writing and
inform the applicant of the reason for the request,
the source of the information that led to the request,
the amount, the applicant’s payment options, and
how the applicant can have the deposit refunded.
(4) A retail supplier may charge a late fee if a
customer’s payment is paid after the due date on the
customer’s bill. The amount of the late fee shall not
exceed customary business practice for consumer
goods.
SEC. 213. UNFAIR TRADE PRACTICES.
The following specific practices shall be prohibited:
(1) SLAMMING.—No electric utility, distributor,
supplier, or any person, firm, corporation, or govern-
mental entity shall make any change or authorize a
different supplier for any residential or small com-
mercial customer until the change has been con-
firmed by an independent third-party verification
company, as follows:
(A) The third-party verification company
shall meet each of the following criteria:
(i) Be independent from the entity
that seeks to provide the new service.
(ii) Not be directly or indirectly man-
aged, controlled, directed, or owned, wholly
or in part, by an entity that seeks to pro-
vide the new service or by any corporation,
firm, or person who directly or indirectly
manages, controls, or directs or owns more
than 5 percent of the entity.
(iii) Operate from facilities physically
separate from those of the entity that
seeks to provide the new service.
(iv) Not derive commissions or com-
pensation based upon the number of sales
confirmed.
(B) The entity seeking to verify the sale
shall do so by connecting the customer by tele-
phone to the third-party verification company
or by arranging for the third-party verification
company to call the customer to confirm the
sale.
(C) The third-party verification company
shall obtain the resident’s oral confirmation re-
garding the change and shall record that con-
firmation by obtaining appropriate verification
data. The record shall be available to the cus-
tomer upon request. Information obtained from
the customer through confirmation shall not be
used for marketing purposes. Any unauthorized
release of this information is grounds for a civil
suit by the aggrieved customer against the en-
tity or its employees who are responsible for the
violation.
(D) Notwithstanding subparagraphs (A),
(B), and (C), a supplier shall not be required
to comply with these provisions when the cus-
tomer directly calls the supplier to make
(4) CRAMMING.—A supplier shall not add op-
tional services to a customer’s bill without receiving
knowledgeable consent from the customer.
(5) CANCELLATION.—In addition to any other
right to revoke an offer, residential and small com-
mercial customers have the right to cancel a con-
tract without fee or penalty for electric service until
midnight of the third business day after the day on
which the buyer receives a written confirmation of
the agreement to purchase such service. Cancellation
occurs when the buyer gives written notice of can-
cellation to the seller at the address specified in the
agreement or offer. Notice of cancellation, if given
by mail, is effective when deposited in the mail prop-
erly addressed with postage prepaid. Notice of can-
cellation given by the buyer need not take the par-
ticular form as provided with the contract or offer
to purchase and, however expressed, is effective if it
indicates the intention of the buyer not to be bound
by the contract.
SEC. 214. METERS.
(a) STANDARD METERS.—A distributor shall con-
tinue its obligation to furnish a standard meter to any
residential and small commercial applicant for service at
a previously unserved location without separate charge.
(b) INSTALLATION OF DIFFERENT METERS.—A cus-
tomer may install a different meter if it meets the tech-
nical qualifications and installation specifications estab-
lished by the distributor. The distributor may adopt rea-
sonable procedures to assure compliance with its technical
qualifications and installation specifications and shall in-
form its customers of these requirements promptly upon
request.
(c) PRICE VARIATIONS.—A supplier may vary the
price of electricity based on the type and capacity of the
installed meter to record hourly or seasonal prices. A sup-
plier’s terms may include a requirement that a customer
with a nonhourly meter pay a separate fee or penalty if
the customer cancels a contract during certain times of
the year or without specified notice to the supplier.
(d) SALE OR LEASE OF DIFFERENT METERS.—A
supplier may offer to sell or lease a different meter and
to bill and collect separately for the meter on the electric
bill issued by a supplier or distributor.
(e) LOAD CURVES.—As a condition of offering elec-
tricity for sale within a territory served by a distributor,
a supplier must enter into an agreement with the party
responsible for settlement of network operations. These
agreements must allow for the use of average load shape
curves to bill and pay for the use of electricity by cus-
100
tomers without hourly-metered consumption. The average
curves shall be calculated at least four times per calendar
year for each supplier’s customers without hourly meters.
(f) PAYMENT PRIOR TO DELIVERY.—It shall be un-
lawful to use or to require the use of a prepayment meter,
service limiter, or other device or program that requires
cash payment prior to the delivery of the service.
SEC. 215. EXEMPTION RESCINDED FROM EQUAL CREDIT
OPPORTUNITY ACT.
The regulations implementing the Equal Credit Op-
portunity Act (15 U.S.C sections 1691–1691(f)) exempt-
ing regulated utilities from application of certain provi-
sions of that Act, shall not apply to transactions concern-
ing the sale of services in a deregulated market.
SEC. 216. CONSUMER REMEDIES.
(a) IN GENERAL.—A consumer damaged by a viola-
tion of this section by an entity offering retail electricity
service is entitled to recover all of the following:
(1) Actual damages.
(2) The consumer’s attorney’s fees and court
costs.
(3) Exemplary damages, in the amount the
court deems proper, for intentional or willful viola-
tions.
(4) Equitable relief as the court deems proper.
101
(b) OTHER RIGHTS.—The rights, remedies and pen-
alties established by this section are in addition to the
rights, remedies or penalties established under any other
law.
Æ