542
ment, in the transfer of technologies developed with public
funds to the offshore and maritime industry, and in man-
agement of an offshore and maritime industry consortium.
The program consortium selected under section 942 shall
not be eligible for selection under this section. When ap-
propriate, the Secretary shall consider utilizing the entity
selected under this section when implementing the activi-
ties authorized by section 975.
SEC. 934. RESEARCH AND DEVELOPMENT FOR COAL MIN-
ING TECHNOLOGIES.
(a) ESTABLISHMENT.—The Secretary shall carry out
a program of research and development on coal mining
technologies. The Secretary shall cooperate with appro-
priate Federal agencies, coal producers, trade associations,
equipment manufacturers, institutions of higher education
with mining engineering departments, and other relevant
entities.
(b) PROGRAM.—The research and development activi-
ties carried out under this section shall—
(1) be guided by the mining research and devel-
opment priorities identified by the Mining Industry
of the Future Program and in the recommendations
from relevant reports of the National Academy of
Sciences on mining technologies;
543
(2) include activities exploring minimization of
contaminants in mined coal that contribute to envi-
ronmental concerns including development and dem-
onstration of electromagnetic wave imaging ahead of
mining operations;
(3) develop and demonstrate electromagnetic
wave imaging and radar techniques for horizontal
drilling in coal beds in order to increase methane re-
covery efficiency, prevent spoilage of domestic coal
reserves, and minimize water disposal associated
with methane extraction; and
(4) expand mining research capabilities at insti-
tutions of higher education.
SEC. 935. COAL AND RELATED TECHNOLOGIES PROGRAM.
(a) IN GENERAL.—In addition to the programs au-
thorized under title IV, the Secretary shall conduct a pro-
gram of technology research, development, demonstration,
and commercial application for coal and power systems,
including programs to facilitate production and generation
of coal-based power through—
(1) innovations for existing plants;
(2) integrated gasification combined cycle;
(3) advanced combustion systems;
(4) turbines for synthesis gas derived from coal;
544
(5) carbon capture and sequestration research
and development;
(6) coal-derived transportation fuels and chemi-
cals;
(7) solid fuels and feedstocks;
(8) advanced coal-related research;
(9) advanced separation technologies; and
(10) a joint project for permeability enhance-
ment in coals for natural gas production and carbon
dioxide sequestration.
(b) COST AND PERFORMANCE GOALS.—In carrying
out programs authorized by this section, the Secretary
shall identify cost and performance goals for coal-based
technologies that would permit the continued cost-com-
petitive use of coal for electricity generation, as chemical
feedstocks, and as transportation fuel in 2007, 2015, and
the years after 2020. In establishing such cost and per-
formance goals, the Secretary shall—
(1) consider activities and studies undertaken
to date by industry in cooperation with the Depart-
ment in support of such assessment;
(2) consult with interested entities, including
coal producers, industries using coal, organizations
to promote coal and advanced coal technologies, en-
545
vironmental organizations, and organizations rep-
resenting workers;
(3) not later than 120 days after the date of
enactment of this Act, publish in the Federal Reg-
ister proposed draft cost and performance goals for
public comments; and
(4) not later than 180 days after the date of
enactment of this Act and every 4 years thereafter,
submit to Congress a report describing final cost
and performance goals for such technologies that in-
cludes a list of technical milestones as well as an ex-
planation of how programs authorized in this section
will not duplicate the activities authorized under the
Clean Coal Power Initiative authorized under sub-
title A of title IV.
SEC. 936. COMPLEX WELL TECHNOLOGY TESTING FACIL-
ITY.
The Secretary, in coordination with industry leaders
in extended research drilling technology, shall establish a
Complex Well Technology Testing Facility at the Rocky
Mountain Oilfield Testing Center to increase the range of
extended drilling technologies.
546
SEC. 937. FISCHER-TROPSCH DIESEL FUEL LOAN GUAR-
ANTEE PROGRAM.
(a) DEFINITION
OF
FISCHER-TROPSCH
DIESEL
FUEL.—In this section, the term ‘‘Fischer-Tropsch diesel
fuel’’ means diesel fuel that—
(1) contains less than 10 parts per million sul-
fur; and
(2) is produced through the Fischer-Tropsch
liquification process from coal or waste from coal
that was mined in the United States.
(b) LOAN GUARANTEES.—
(1) ESTABLISHMENT OF PROGRAM.—The Sec-
retary of Energy shall establish a program to pro-
vide guarantees of loans by private lending institu-
tions for the construction of facilities for the produc-
tion of Fischer-Tropsch diesel fuel and commercial
byproducts of that production.
(2) REQUIREMENTS.—The Secretary may pro-
vide a loan guarantee under paragraph (1) if—
(A) without a loan guarantee, credit is not
available to the applicant under reasonable
terms or conditions sufficient to finance the
construction of a facility described in paragraph
(1);
(B) the prospective earning power of the
applicant and the character and value of the se-
547
curity pledged provide a reasonable assurance
of repayment of the loan to be guaranteed in
accordance with the terms of the loan; and
(C) the loan bears interest at a rate deter-
mined by the Secretary to be reasonable, taking
into account the current average yield on out-
standing obligations of the United States with
remaining periods of maturity comparable to
the maturity of the loan.
(3) CRITERIA.—In selecting recipients of loan
guarantees from among applicants, the Secretary
shall give preference to proposals that—
(A) meet all Federal and State permitting
requirements;
(B) are most likely to be successful; and
(C) are located in local markets that have
the greatest need for the facility because of—
(i) the availability of domestic coal or
coal waste for conversion; or
(ii) a projected high level of demand
for Fischer-Tropsch diesel fuel or other
commercial byproducts of the facility.
(4) MATURITY.—A loan guaranteed under
paragraph (1) shall have a maturity of not more
than 25 years.
548
(5) TERMS AND CONDITIONS.—The loan agree-
ment for a loan guaranteed under paragraph (1)
shall provide that no provision of the loan may be
amended or waived without the consent of the Sec-
retary.
(6) GUARANTEE FEE.—A recipient of a loan
guarantee under paragraph (1) shall pay the Sec-
retary an amount to be determined by the Secretary
to be sufficient to cover the administrative costs of
the Secretary relating to the loan guarantee.
(7) FULL FAITH AND CREDIT.—
(A) IN GENERAL.—The full faith and cred-
it of the United States is pledged to payment
of loan guarantees made under this section.
(B) CONCLUSIVE
EVIDENCE.—Any loan
guarantee made by the Secretary under this
section shall be conclusive evidence of the eligi-
bility of the loan for the guarantee with respect
to principal and interest.
(C) VALIDITY.—The validity of a loan
guarantee shall be incontestable in the hands of
a holder of the guaranteed loan.
(8) REPORTS.—Until each guaranteed loan
under this section is repaid in full, the Secretary
549
shall annually submit to Congress a report on the
activities of the Secretary under this section.
(9) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated such sums
as are necessary to carry out this section.
(10) TERMINATION OF AUTHORITY.—The au-
thority of the Secretary to issue a new loan guar-
antee under paragraph (1) terminates on the date
that is 5 years after the date of enactment of this
Act.
PART II—ULTRA-DEEPWATER AND UNCONVEN-
TIONAL NATURAL GAS AND OTHER PETRO-
LEUM RESOURCES
SEC. 941. PROGRAM AUTHORITY.
(a) IN GENERAL.—The Secretary shall carry out a
program under this part of research, development, dem-
onstration, and commercial application of technologies for
ultra-deepwater and unconventional natural gas and other
petroleum resource exploration and production, including
addressing the technology challenges for small producers,
safe operations, and environmental mitigation (including
reduction of greenhouse gas emissions and sequestration
of carbon).
(b) PROGRAM ELEMENTS.—The program under this
part shall address the following areas, including improving
550
safety and minimizing environmental impacts of activities
within each area:
(1) Ultra-deepwater technology, including drill-
ing to formations in the Outer Continental Shelf to
depths greater than 15,000 feet.
(2) Ultra-deepwater architecture.
(3) Unconventional natural gas and other petro-
leum resource exploration and production tech-
nology, including the technology challenges of small
producers.
(c) LIMITATION ON LOCATION OF FIELD ACTIVI-
TIES.—Field activities under the program under this part
shall be carried out only—
(1) in—
(A) areas in the territorial waters of the
United States not under any Outer Continental
Shelf moratorium as of September 30, 2002;
(B) areas onshore in the United States on
public land administered by the Secretary of the
Interior available for oil and gas leasing, where
consistent with applicable law and land use
plans; and
(C) areas onshore in the United States on
State or private land, subject to applicable law;
and
551
(2) with the approval of the appropriate Fed-
eral or State land management agency or private
land owner.
(d) RESEARCH AT NATIONAL ENERGY TECHNOLOGY
LABORATORY.—The Secretary, through the National En-
ergy Technology Laboratory, shall carry out research com-
plementary to research under subsection (b).
(e) CONSULTATION WITH SECRETARY OF THE INTE-
RIOR.—In carrying out this part, the Secretary shall con-
sult regularly with the Secretary of the Interior.
SEC. 942. ULTRA-DEEPWATER PROGRAM.
(a) IN GENERAL.—The Secretary shall carry out the
activities under section 941(a), to maximize the use of the
ultra-deepwater natural gas and other petroleum resources
of the United States by increasing the supply of such re-
sources, through reducing the cost and increasing the effi-
ciency of exploration for and production of such resources,
while improving safety and minimizing environmental im-
pacts.
(b) ROLE OF THE SECRETARY.—The Secretary shall
have ultimate responsibility for, and oversight of, all as-
pects of the program under this section.
(c) ROLE OF THE PROGRAM CONSORTIUM.—
(1) IN GENERAL.—The Secretary may contract
with a consortium to—
552
(A) manage awards pursuant to subsection
(f)(4);
(B) make recommendations to the Sec-
retary for project solicitations;
(C) disburse funds awarded under sub-
section (f) as directed by the Secretary in ac-
cordance with the annual plan under subsection
(e); and
(D) carry out other activities assigned to
the program consortium by this section.
(2) LIMITATION.—The Secretary may not as-
sign any activities to the program consortium except
as specifically authorized under this section.
(3) CONFLICT OF INTEREST.—
(A) PROCEDURES.—The Secretary shall
establish procedures—
(i) to ensure that each board member,
officer, or employee of the program consor-
tium who is in a decision-making capacity
under subsection (f)(3) or (4) shall disclose
to the Secretary any financial interests in,
or financial relationships with, applicants
for or recipients of awards under this sec-
tion, including those of his or her spouse
or minor child, unless such relationships or
553
interests would be considered to be remote
or inconsequential; and
(ii) to require any board member, offi-
cer, or employee with a financial relation-
ship or interest disclosed under clause (i)
to recuse himself or herself from any re-
view under subsection (f)(3) or oversight
under subsection (f)(4) with respect to
such applicant or recipient.
(B) FAILURE TO COMPLY.—The Secretary
may disqualify an application or revoke an
award under this section if a board member, of-
ficer, or employee has failed to comply with pro-
cedures required under subparagraph (A)(ii).
(d) SELECTION OF THE PROGRAM CONSORTIUM.—
(1) IN GENERAL.—The Secretary shall select
the program consortium through an open, competi-
tive process.
(2) MEMBERS.—The program consortium may
include corporations, trade associations, institutions
of higher education, National Laboratories, or other
research institutions. After submitting a proposal
under paragraph (4), the program consortium may
not add members without the consent of the Sec-
retary.
554
(3) TAX
STATUS.—The program consortium
shall be an entity that is exempt from tax under sec-
tion 501(c)(3) of the Internal Revenue Code of
1986.
(4) SCHEDULE.—Not later than 180 days after
the date of enactment of this Act, the Secretary
shall solicit proposals from eligible consortia to per-
form the duties in subsection (c)(1), which shall be
submitted not later than 360 days after the date of
enactment of this Act. The Secretary shall select the
program consortium not later than 18 months after
such date of enactment.
(5) APPLICATION.—Applicants shall submit a
proposal including such information as the Secretary
may require. At a minimum, each proposal shall—
(A) list all members of the consortium;
(B) fully describe the structure of the con-
sortium, including any provisions relating to in-
tellectual property; and
(C) describe how the applicant would carry
out the activities of the program consortium
under this section.
(6) ELIGIBILITY.—To be eligible to be selected
as the program consortium, an applicant must be an
entity whose members collectively have demonstrated
555
capabilities in planning and managing research, de-
velopment, demonstration, and commercial applica-
tion programs in natural gas or other petroleum ex-
ploration or production.
(7) CRITERION.—The Secretary shall consider
the amount of the fee an applicant proposes to re-
ceive under subsection (g) in selecting a consortium
under this section.
(e) ANNUAL PLAN.—
(1) IN GENERAL.—The program under this sec-
tion shall be carried out pursuant to an annual plan
prepared by the Secretary in accordance with para-
graph (2).
(2) DEVELOPMENT.—
(A) 
SOLICITATION
OF
RECOMMENDA-
TIONS.—Before drafting an annual plan under
this subsection, the Secretary shall solicit spe-
cific written recommendations from the pro-
gram consortium for each element to be ad-
dressed in the plan, including those described in
paragraph (4). The Secretary may request that
the 
program 
consortium 
submit 
its 
rec-
ommendations in the form of a draft annual
plan.
556
(B) SUBMISSION
OF
RECOMMENDATIONS;
OTHER COMMENT.—The Secretary shall submit
the recommendations of the program consor-
tium under subparagraph (A) to the Ultra-
Deepwater Advisory Committee established
under section 945(a) for review, and such Advi-
sory Committee shall provide to the Secretary
written comments by a date determined by the
Secretary. The Secretary may also solicit com-
ments from any other experts.
(C) CONSULTATION.—The Secretary shall
consult regularly with the program consortium
throughout the preparation of the annual plan.
(3) PUBLICATION.—The Secretary shall trans-
mit to Congress and publish in the Federal Register
the annual plan, along with any written comments
received under paragraph (2)(A) and (B).
(4) CONTENTS.—The annual plan shall describe
the ongoing and prospective activities of the pro-
gram under this section and shall include—
(A) a list of any solicitations for awards
that the Secretary plans to issue to carry out
research, development, demonstration, or com-
mercial application activities, including the top-
ics for such work, who would be eligible to
557
apply, selection criteria, and the duration of
awards; and
(B) a description of the activities expected
of the program consortium to carry out sub-
section (f)(4).
(5) ESTIMATES
OF
INCREASED
ROYALTY
RE-
CEIPTS.—The Secretary, in consultation with the
Secretary of the Interior, shall provide an annual re-
port to Congress with the President’s budget on the
estimated cumulative increase in Federal royalty re-
ceipts (if any) resulting from the implementation of
this part. The initial report under this paragraph
shall be submitted in the first President’s budget fol-
lowing the completion of the first annual plan re-
quired under this subsection.
(f) AWARDS.—
(1) IN GENERAL.—The Secretary shall make
awards to carry out research, development, dem-
onstration, and commercial application activities
under the program under this section. The program
consortium shall not be eligible to receive such
awards, but members of the program consortium
may receive such awards.
(2) PROPOSALS.—The Secretary shall solicit
proposals for awards under this subsection in such
558
manner and at such time as the Secretary may pre-
scribe, in consultation with the program consortium.
(3) REVIEW.—The Secretary shall make awards
under this subsection through a competitive process,
which shall include a review by individuals selected
by the Secretary. Such individuals shall include, for
each application, Federal officials, the program con-
sortium, and non-Federal experts who are not board
members, officers, or employees of the program con-
sortium or of a member of the program consortium.
(4) OVERSIGHT.—
(A) IN
GENERAL.—The program consor-
tium shall oversee the implementation of
awards under this subsection, consistent with
the annual plan under subsection (e), including
disbursing funds and monitoring activities car-
ried out under such awards for compliance with
the terms and conditions of the awards.
(B) EFFECT.—Nothing in subparagraph
(A) shall limit the authority or responsibility of
the Secretary to oversee awards, or limit the
authority of the Secretary to review or revoke
awards.
(C) PROVISION
OF
INFORMATION.—The
Secretary shall provide to the program consor-
559
tium the information necessary for the program
consortium to carry out its responsibilities
under this paragraph.
(g) ADMINISTRATIVE COSTS.—
(1) IN GENERAL.—To compensate the program
consortium for carrying out its activities under this
section, the Secretary shall provide to the program
consortium funds sufficient to administer the pro-
gram. This compensation may include a manage-
ment fee consistent with Department of Energy con-
tracting practices and procedures.
(2) ADVANCE.—The Secretary shall advance
funds to the program consortium upon selection of
the consortium, which shall be deducted from
amounts to be provided under paragraph (1).
(h) AUDIT.—The Secretary shall retain an inde-
pendent, commercial auditor to determine the extent to
which funds provided to the program consortium, and
funds provided under awards made under subsection (f),
have been expended in a manner consistent with the pur-
poses and requirements of this part. The auditor shall
transmit a report annually to the Secretary, who shall
transmit the report to Congress, along with a plan to rem-
edy any deficiencies cited in the report.
560
SEC. 943. UNCONVENTIONAL NATURAL GAS AND OTHER PE-
TROLEUM RESOURCES PROGRAM.
(a) IN GENERAL.—The Secretary shall carry out ac-
tivities under subsection 941(b)(3), to maximize the use
of the onshore unconventional natural gas and other petro-
leum resources of the United States, by increasing the
supply of such resources, through reducing the cost and
increasing the efficiency of exploration for and production
of such resources, while improving safety and minimizing
environmental impacts.
(b) AWARDS.—
(1) IN
GENERAL.—The Secretary shall carry
out this section through awards to research con-
sortia made through an open, competitive process.
As a condition of award of funds, qualified research
consortia shall—
(A) demonstrate capability and experience
in unconventional onshore natural gas or other
petroleum research and development;
(B) provide a research plan that dem-
onstrates how additional natural gas or oil pro-
duction will be achieved; and
(C) at the request of the Secretary, provide
technical advice to the Secretary for the pur-
poses of developing the annual plan required
under subsection (e).
561
(2) PRODUCTION
POTENTIAL.—The Secretary
shall seek to ensure that the number and types of
awards made under this subsection have reasonable
potential to lead to additional oil and natural gas
production on Federal lands.
(3) SCHEDULE.—To carry out this subsection,
not later than 180 days after the date of enactment
of this Act, the Secretary shall solicit proposals from
research consortia, which shall be submitted not
later than 360 days after the date of enactment of
this Act. The Secretary shall select the first group
of research consortia to receive awards under this
subsection not later than 18 months after such date
of enactment.
(c) AUDIT.—The Secretary shall retain an inde-
pendent, commercial auditor to determine the extent to
which funds provided under awards made under this sec-
tion have been expended in a manner consistent with the
purposes and requirements of this part. The auditor shall
transmit a report annually to the Secretary, who shall
transmit the report to Congress, along with a plan to rem-
edy any deficiencies cited in the report.
(d) FOCUS AREAS FOR AWARDS.—
(1) UNCONVENTIONAL
RESOURCES.—Awards
from allocations under section 949(d)(2) shall focus
562
on areas including advanced coalbed methane, deep
drilling, natural gas production from tight sands,
natural gas production from gas shales, stranded
gas, innovative exploration and production tech-
niques, enhanced recovery techniques, and environ-
mental mitigation of unconventional natural gas and
other petroleum resources exploration and produc-
tion.
(2) SMALL PRODUCERS.—Awards from alloca-
tions under section 949(d)(3) shall be made to con-
sortia consisting of small producers or organized pri-
marily for the benefit of small producers, and shall
focus on areas including complex geology involving
rapid changes in the type and quality of the oil and
gas reservoirs across the reservoir; low reservoir
pressure; unconventional natural gas reservoirs in
coalbeds, deep reservoirs, tight sands, or shales; and
unconventional oil reservoirs in tar sands and oil
shales.
(e) ANNUAL PLAN.—
(1) IN GENERAL.—The program under this sec-
tion shall be carried out pursuant to an annual plan
prepared by the Secretary in accordance with para-
graph (2).
(2) DEVELOPMENT.—
563
(A) WRITTEN
RECOMMENDATIONS.—Be-
fore drafting an annual plan under this sub-
section, the Secretary shall solicit specific writ-
ten recommendations from the research con-
sortia receiving awards under subsection (b)
and the Unconventional Resources Technology
Advisory Committee for each element to be ad-
dressed in the plan, including those described in
subparagraph (D).
(B) CONSULTATION.—The Secretary shall
consult regularly with the research consortia
throughout the preparation of the annual plan.
(C) PUBLICATION.—The Secretary shall
transmit to Congress and publish in the Fed-
eral Register the annual plan, along with any
written comments received under subparagraph
(A).
(D) CONTENTS.—The annual plan shall
describe the ongoing and prospective activities
under this section and shall include a list of any
solicitations for awards that the Secretary plans
to issue to carry out research, development,
demonstration, or commercial application activi-
ties, including the topics for such work, who
564
would be eligible to apply, selection criteria, and
the duration of awards.
(3) ESTIMATES
OF
INCREASED
ROYALTY
RE-
CEIPTS.—The Secretary, in consultation with the
Secretary of the Interior, shall provide an annual re-
port to Congress with the President’s budget on the
estimated cumulative increase in Federal royalty re-
ceipts (if any) resulting from the implementation of
this part. The initial report under this paragraph
shall be submitted in the first President’s budget fol-
lowing the completion of the first annual plan re-
quired under this subsection.
(f) ACTIVITIES BY THE UNITED STATES GEOLOGI-
CAL SURVEY.—The Secretary of the Interior, through the
United States Geological Survey, shall, where appropriate,
carry out programs of long-term research to complement
the programs under this section.
SEC. 944. ADDITIONAL REQUIREMENTS FOR AWARDS.
(a) DEMONSTRATION PROJECTS.—An application for
an award under this part for a demonstration project shall
describe with specificity the intended commercial use of
the technology to be demonstrated.
(b) FLEXIBILITY
IN LOCATING DEMONSTRATION
PROJECTS.—Subject to the limitation in section 941(c),
a demonstration project under this part relating to an
565
ultra-deepwater technology or an ultra-deepwater architec-
ture may be conducted in deepwater depths.
(c) INTELLECTUAL PROPERTY AGREEMENTS.—If an
award under this part is made to a consortium (other than
the program consortium), the consortium shall provide to
the Secretary a signed contract agreed to by all members
of the consortium describing the rights of each member
to intellectual property used or developed under the award.
(d) TECHNOLOGY TRANSFER.—2.5 percent of the
amount of each award made under this part shall be des-
ignated for technology transfer and outreach activities
under this title.
(e) COST SHARING REDUCTION FOR INDEPENDENT
PRODUCERS.—In applying the cost sharing requirements
under section 972 to an award under this part the Sec-
retary may reduce or eliminate the non-Federal require-
ment if the Secretary determines that the reduction is nec-
essary and appropriate considering the technological risks
involved in the project.
SEC. 945. ADVISORY COMMITTEES.
(a) ULTRA-DEEPWATER ADVISORY COMMITTEE.—
(1) ESTABLISHMENT.—Not later than 270 days
after the date of enactment of this Act, the Sec-
retary shall establish an advisory committee to be
known as the Ultra-Deepwater Advisory Committee.
566
(2) MEMBERSHIP.—The advisory committee
under this subsection shall be composed of members
appointed by the Secretary including—
(A) individuals with extensive research ex-
perience or operational knowledge of offshore
natural gas and other petroleum exploration
and production;
(B) individuals broadly representative of
the affected interests in ultra-deepwater natural
gas and other petroleum production, including
interests in environmental protection and safe
operations;
(C) no individuals who are Federal employ-
ees; and
(D) no individuals who are board members,
officers, or employees of the program consor-
tium.
(3) DUTIES.—The advisory committee under
this subsection shall—
(A) advise the Secretary on the develop-
ment and implementation of programs under
this part related to ultra-deepwater natural gas
and other petroleum resources; and
(B) carry out section 942(e)(2)(B).
567
(4) COMPENSATION.—A member of the advi-
sory committee under this subsection shall serve
without compensation but shall receive travel ex-
penses in accordance with applicable provisions
under subchapter I of chapter 57 of title 5, United
States Code.
(b) UNCONVENTIONAL
RESOURCES
TECHNOLOGY
ADVISORY COMMITTEE.—
(1) ESTABLISHMENT.—Not later than 270 days
after the date of enactment of this Act, the Sec-
retary shall establish an advisory committee to be
known as the Unconventional Resources Technology
Advisory Committee.
(2) MEMBERSHIP.—The advisory committee
under this subsection shall be composed of members
appointed by the Secretary including—
(A) a majority of members who are em-
ployees or representatives of independent pro-
ducers of natural gas and other petroleum, in-
cluding small producers;
(B) individuals with extensive research ex-
perience or operational knowledge of unconven-
tional natural gas and other petroleum resource
exploration and production;
568
(C) individuals broadly representative of
the affected interests in unconventional natural
gas and other petroleum resource exploration
and production, including interests in environ-
mental protection and safe operations; and
(D) no individuals who are Federal em-
ployees.
(3) DUTIES.—The advisory committee under
this subsection shall advise the Secretary on the de-
velopment and implementation of activities under
this part related to unconventional natural gas and
other petroleum resources.
(4) COMPENSATION.—A member of the advi-
sory committee under this subsection shall serve
without compensation but shall receive travel ex-
penses in accordance with applicable provisions
under subchapter I of chapter 57 of title 5, United
States Code.
(c) PROHIBITION.—No advisory committee estab-
lished under this section shall make recommendations on
funding awards to particular consortia or other entities,
or for specific projects.
SEC. 946. LIMITS ON PARTICIPATION.
An entity shall be eligible to receive an award under
this part only if the Secretary finds—
569
(1) that the entity’s participation in the pro-
gram under this part would be in the economic in-
terest of the United States; and
(2) that either—
(A) the entity is a United States-owned en-
tity organized under the laws of the United
States; or
(B) the entity is organized under the laws
of the United States and has a parent entity or-
ganized under the laws of a country that
affords—
(i) to United States-owned entities op-
portunities, comparable to those afforded
to any other entity, to participate in any
cooperative research venture similar to
those authorized under this part;
(ii) to United States-owned entities
local investment opportunities comparable
to those afforded to any other entity; and
(iii) adequate and effective protection
for the intellectual property rights of
United States-owned entities.
SEC. 947. SUNSET.
The authority provided by this part shall terminate
on September 30, 2011.
570
SEC. 948. DEFINITIONS.
In this part:
(1) 
DEEPWATER.—The 
term 
‘‘deepwater’’
means a water depth that is greater than 200 but
less than 1,500 meters.
(2) INDEPENDENT
PRODUCER
OF
OIL
OR
GAS.—
(A) IN GENERAL.—The term ‘‘independent
producer of oil or gas’’ means any person that
produces oil or gas other than a person to
whom subsection (c) of section 613A of the In-
ternal Revenue Code of 1986 does not apply by
reason of paragraph (2) (relating to certain re-
tailers) or paragraph (4) (relating to certain re-
finers) of section 613A(d) of such Code.
(B) RULES FOR APPLYING PARAGRAPHS (2)
AND (4) OF SECTION 613A(d).—For purposes of
subparagraph (A), paragraphs (2) and (4) of
section 613A(d) of the Internal Revenue Code
of 1986 shall be applied by substituting ‘‘cal-
endar year’’ for ‘‘taxable year’’ each place it ap-
pears in such paragraphs.
(3) PROGRAM CONSORTIUM.—The term ‘‘pro-
gram consortium’’ means the consortium selected
under section 942(d).
571
(4) REMOTE OR INCONSEQUENTIAL.—The term
‘‘remote or inconsequential’’ has the meaning given
that term in regulations issued by the Office of Gov-
ernment Ethics under section 208(b)(2) of title 18,
United States Code.
(5) SMALL PRODUCER.—The term ‘‘small pro-
ducer’’ means an entity organized under the laws of
the United States with production levels of less than
1,000 barrels per day of oil equivalent.
(6) ULTRA-DEEPWATER.—The term ‘‘ultra-
deepwater’’ means a water depth that is equal to or
greater than 1,500 meters.
(7) ULTRA-DEEPWATER
ARCHITECTURE.—The
term ‘‘ultra-deepwater architecture’’ means the inte-
gration of technologies for the exploration for, or
production of, natural gas or other petroleum re-
sources located at ultra-deepwater depths.
(8) ULTRA-DEEPWATER
TECHNOLOGY.—The
term ‘‘ultra-deepwater technology’’ means a discrete
technology that is specially suited to address 1 or
more challenges associated with the exploration for,
or production of, natural gas or other petroleum re-
sources located at ultra-deepwater depths.
(9) UNCONVENTIONAL
NATURAL
GAS
AND
OTHER PETROLEUM RESOURCE.—The term ‘‘uncon-
572
ventional natural gas and other petroleum resource’’
means natural gas and other petroleum resource lo-
cated onshore in an economically inaccessible geo-
logical formation, including resources of small pro-
ducers.
SEC. 949. FUNDING.
(a) IN GENERAL.—
(1) OIL AND GAS LEASE INCOME.—For each of
fiscal years 2004 through 2013, from any Federal
royalties, rents, and bonuses derived from Federal
onshore and offshore oil and gas leases issued under
the Outer Continental Shelf Lands Act and the Min-
eral Leasing Act which are deposited in the Treas-
ury, and after distribution of any such funds as de-
scribed in subsection (c), $150,000,000 shall be de-
posited into the Ultra-Deepwater and Unconven-
tional Natural Gas and Other Petroleum Research
Fund (in this section referred to as the Fund). For
purposes of this section, the term ‘‘royalties’’ ex-
cludes proceeds from the sale of royalty production
taken in kind and royalty production that is trans-
ferred under section 27(a)(3) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1353(a)(3)).
(2) AUTHORIZATION OF APPROPRIATIONS.—In
addition to amounts described in paragraph (1),
573
there are authorized to be appropriated to the Sec-
retary, to be deposited in the Fund, $50,000,000 for
each of the fiscal years 2004 through 2013, to re-
main available until expended.
(b) OBLIGATIONAL
AUTHORITY.—Monies in the
Fund shall be available to the Secretary for obligation
under this part without fiscal year limitation, to remain
available until expended.
(c) PRIOR DISTRIBUTIONS.—The distributions de-
scribed in subsection (a) are those required by law—
(1) to States and to the Reclamation Fund
under the Mineral Leasing Act (30 U.S.C. 191(a));
and
(2) to other funds receiving monies from Fed-
eral oil and gas leasing programs, including—
(A) any recipients pursuant to section 8(g)
of the Outer Continental Shelf Lands Act (43
U.S.C. 1337(g));
(B) the Land and Water Conservation
Fund, pursuant to section 2(c) of the Land and
Water Conservation Fund Act of 1965 (16
U.S.C. 4601–5(c));
(C) the Historic Preservation Fund, pursu-
ant to section 108 of the National Historic
Preservation Act (16 U.S.C. 470h); and
574
(D) the Secure Energy Reinvestment
Fund.
(d) ALLOCATION.—Amounts obligated from the Fund
under this section in each fiscal year shall be allocated
as follows:
(1) 50 percent shall be for activities under sec-
tion 942.
(2) 35 percent shall be for activities under sec-
tion 943(d)(1).
(3) 10 percent shall be for activities under sec-
tion 943(d)(2).
(4) 5 percent shall be for research under section
941(d).
(e) FUND.—There is hereby established in the Treas-
ury of the United States a separate fund to be known as
the ‘‘Ultra-Deepwater and Unconventional Natural Gas
and Other Petroleum Research Fund’’.
Subtitle F—Science
SEC. 951. SCIENCE.
(a) IN GENERAL.—The following sums are author-
ized to be appropriated to the Secretary for research, de-
velopment, demonstration, and commercial application ac-
tivities of the Office of Science, including activities author-
ized under this subtitle, including the amounts authorized
under the amendment made by section 958(c)(2)(C), and
575
including basic energy sciences, advanced scientific com-
puting research, biological and environmental research, fu-
sion energy sciences, high energy physics, nuclear physics,
and research analysis and infrastructure support:
(1) For fiscal year 2004, $3,785,000,000.
(2) For fiscal year 2005, $4,153,000,000.
(3) For fiscal year 2006, $4,618,000,000.
(4) For fiscal year 2007, $5,310,000,000.
(5) For fiscal year 2008, $5,800,000,000.
(b) ALLOCATIONS.—From amounts authorized under
subsection (a), the following sums are authorized:
(1) For activities of the Fusion Energy Sciences
Program, including activities under sections 952 and
953—
(A) for fiscal year 2004, $335,000,000;
(B) for fiscal year 2005, $349,000,000;
(C) for fiscal year 2006, $362,000,000;
(D) for fiscal year 2007, $377,000,000;
and
(E) for fiscal year 2008, $393,000,000.
(2) For the Spallation Neutron Source—
(A) for construction in fiscal year 2004,
$124,600,000;
(B) for construction in fiscal year 2005,
$79,800,000;
576
(C) for completion of construction in fiscal
year 2006, $41,100,000; and
(D) for other project costs (including re-
search and development necessary to complete
the project, preoperations costs, and capital
equipment 
related 
to 
construction),
$103,279,000 for the period encompassing fis-
cal years 2003 through 2006, to remain avail-
able until expended through September 30,
2006.
(3) For Catalysis Research activities under sec-
tion 956—
(A) for fiscal year 2004, $33,000,000;
(B) for fiscal year 2005, $35,000,000;
(C) for fiscal year 2006, $36,500,000;
(D) for fiscal year 2007, $38,200,000; and
(E) for fiscal year 2008, $40,100,000.
(4) For Nanoscale Science and Engineering Re-
search activities under section 957—
(A) for fiscal year 2004, $270,000,000;
(B) for fiscal year 2005, $292,000,000;
(C) for fiscal year 2006, $322,000,000;
(D) for fiscal year 2007, $355,000,000;
and
(E) for fiscal year 2008, $390,000,000.
577
(5) For activities under section 957(c), from
the amounts authorized under paragraph (4) of this
subsection—
(A) for fiscal year 2004, $135,000,000;
(B) for fiscal year 2005, $150,000,000;
(C) for fiscal year 2006, $120,000,000;
(D) for fiscal year 2007, $100,000,000;
and
(E) for fiscal year 2008, $125,000,000.
(6) For activities in the Genomes to Life Pro-
gram under section 959—
(A) for fiscal year 2004, $100,000,000;
and
(B) for fiscal years 2005 through 2008,
such sums as may be necessary.
(7) For activities in the Energy-Water Supply
Program under section 961, $30,000,000 for each of
fiscal years 2004 through 2008.
(c) ITER CONSTRUCTION.—In addition to the funds
authorized under subsection (b)(1), such sums as may be
necessary for costs associated with ITER construction,
consistent with limitations under section 952.
578
SEC. 952. UNITED STATES PARTICIPATION IN ITER.
(a) IN GENERAL.—The United States may partici-
pate in ITER in accordance with the provisions of this
section.
(b) AGREEMENT.—
(1) IN GENERAL.—The Secretary is authorized
to negotiate an agreement for United States partici-
pation in ITER.
(2) CONTENTS.—Any agreement for United
States participation in ITER shall, at a minimum—
(A) clearly define the United States finan-
cial contribution to construction and operating
costs;
(B) ensure that the share of ITER’s high-
technology components manufactured in the
United States is at least proportionate to the
United States financial contribution to ITER;
(C) ensure that the United States will not
be financially responsible for cost overruns in
components manufactured in other ITER par-
ticipating countries;
(D) guarantee the United States full ac-
cess to all data generated by ITER;
(E) enable United States researchers to
propose and carry out an equitable share of the
experiments at ITER;
579
(F) provide the United States with a role
in all collective decisionmaking related to ITER;
and
(G) describe the process for discontinuing
or decommissioning ITER and any United
States role in those processes.
(c) PLAN.—The Secretary, in consultation with the
Fusion Energy Sciences Advisory Committee, shall de-
velop a plan for the participation of United States sci-
entists in ITER that shall include the United States re-
search agenda for ITER, methods to evaluate whether
ITER is promoting progress toward making fusion a reli-
able and affordable source of power, and a description of
how work at ITER will relate to other elements of the
United States fusion program. The Secretary shall request
a review of the plan by the National Academy of Sciences.
(d) LIMITATION.—No funds shall be expended for the
construction of ITER until the Secretary has transmitted
to Congress—
(1) the agreement negotiated pursuant to sub-
section (b) and 120 days have elapsed since that
transmission;
(2) a report describing the management struc-
ture of ITER and providing a fixed dollar estimate
of the cost of United States participation in the con-
580
struction of ITER, and 120 days have elapsed since
that transmission;
(3) a report describing how United States par-
ticipation in ITER will be funded without reducing
funding for other programs in the Office of Science,
including other fusion programs, and 60 days have
elapsed since that transmission; and
(4) the plan required by subsection (c) (but not
the National Academy of Sciences review of that
plan), and 60 days have elapsed since that trans-
mission.
(e) ALTERNATIVE TO ITER.—If at any time during
the negotiations on ITER, the Secretary determines that
construction and operation of ITER is unlikely or infeasi-
ble, the Secretary shall send to Congress, as part of the
budget request for the following year, a plan for imple-
menting the domestic burning plasma experiment known
as FIRE, including costs and schedules for such a plan.
The Secretary shall refine such plan in full consultation
with the Fusion Energy Sciences Advisory Committee and
shall also transmit such plan to the National Academy of
Sciences for review.
(f) DEFINITIONS.—In this section and sections
951(b)(1) and (c):
581
(1) CONSTRUCTION.—The term ‘‘construction’’
means the physical construction of the ITER facil-
ity, and the physical construction, purchase, or man-
ufacture of equipment or components that are spe-
cifically designed for the ITER facility, but does not
mean the design of the facility, equipment, or com-
ponents.
(2) FIRE.—The term ‘‘FIRE’’ means the Fu-
sion Ignition Research Experiment, the fusion re-
search experiment for which design work has been
supported by the Department as a possible alter-
native burning plasma experiment in the event that
ITER fails to move forward.
(3) ITER.—The term ‘‘ITER’’ means the
international burning plasma fusion research project
in which the President announced United States
participation on January 30, 2003.
SEC. 953. PLAN FOR FUSION ENERGY SCIENCES PROGRAM.
(a) DECLARATION OF POLICY.—It shall be the policy
of the United States to conduct research, development,
demonstration, and commercial application to provide for
the scientific, engineering, and commercial infrastructure
necessary to ensure that the United States is competitive
with other nations in providing fusion energy for its own
needs and the needs of other nations, including by dem-
582
onstrating electric power or hydrogen production for the
United States energy grid utilizing fusion energy at the
earliest date possible.
(b) PLANNING.—
(1) IN
GENERAL.—Not later than 180 days
after the date of enactment of this Act, the Sec-
retary shall present to Congress a plan, with pro-
posed cost estimates, budgets, and potential inter-
national partners, for the implementation of the pol-
icy described in subsection (a). The plan shall ensure
that—
(A) existing fusion research facilities are
more fully utilized;
(B) fusion science, technology, theory, ad-
vanced computation, modeling, and simulation
are strengthened;
(C) new magnetic and inertial fusion re-
search facilities are selected based on scientific
innovation, cost effectiveness, and their poten-
tial to advance the goal of practical fusion en-
ergy at the earliest date possible, and those that
are selected are funded at a cost-effective rate;
(D) communication of scientific results and
methods between the fusion energy science com-
583
munity and the broader scientific and tech-
nology communities is improved;
(E) inertial confinement fusion facilities
are utilized to the extent practicable for the
purpose of inertial fusion energy research and
development; and
(F) attractive alternative inertial and mag-
netic fusion energy approaches are more fully
explored.
(2) COSTS AND SCHEDULES.—Such plan shall
also address the status of and, to the degree pos-
sible, costs and schedules for—
(A) in coordination with the program
under section 960, the design and implementa-
tion of international or national facilities for the
testing of fusion materials; and
(B) the design and implementation of
international or national facilities for the test-
ing and development of key fusion technologies.
SEC. 954. SPALLATION NEUTRON SOURCE.
(a) DEFINITION.—For the purposes of this section,
the term ‘‘Spallation Neutron Source’’ means Department
Project 99–E–334, Oak Ridge National Laboratory, Oak
Ridge, Tennessee.
584
(b) REPORT.—The Secretary shall report on the
Spallation Neutron Source as part of the Department’s
annual budget submission, including a description of the
achievement of milestones, a comparison of actual costs
to estimated costs, and any changes in estimated project
costs or schedule.
(c) LIMITATIONS.—The total amount obligated by the
Department, including prior year appropriations, for the
Spallation Neutron Source shall not exceed—
(1) $1,192,700,000 for costs of construction;
(2) $219,000,000 for other project costs; and
(3) $1,411,700,000 for total project cost.
SEC. 955. SUPPORT FOR SCIENCE AND ENERGY FACILITIES
AND INFRASTRUCTURE.
(a) FACILITY AND INFRASTRUCTURE POLICY.—The
Secretary shall develop and implement a strategy for fa-
cilities and infrastructure supported primarily from the
Office of Science, the Office of Energy Efficiency and Re-
newable Energy, the Office of Fossil Energy, or the Office
of Nuclear Energy, Science, and Technology Programs at
all National Laboratories and single-purpose research fa-
cilities. Such strategy shall provide cost-effective means
for—
(1) maintaining existing facilities and infra-
structure, as needed;
585
(2) closing unneeded facilities;
(3) making facility modifications; and
(4) building new facilities.
(b) REPORT.—
(1) IN GENERAL.—The Secretary shall prepare
and transmit, along with the President’s budget re-
quest to Congress for fiscal year 2006, a report con-
taining the strategy developed under subsection (a).
(2) CONTENTS.—For each National Laboratory
and single-purpose research facility, for the facilities
primarily used for science and energy research, such
report shall contain—
(A) the current priority list of proposed fa-
cilities and infrastructure projects, including
cost and schedule requirements;
(B) a current 10-year plan that dem-
onstrates the reconfiguration of its facilities and
infrastructure to meet its missions and to ad-
dress its long-term operational costs and return
on investment;
(C) the total current budget for all facili-
ties and infrastructure funding; and
(D) the current status of each facility and
infrastructure project compared to the original
baseline cost, schedule, and scope.
586
SEC. 956. CATALYSIS RESEARCH AND DEVELOPMENT PRO-
GRAM.
(a) ESTABLISHMENT.—The Secretary, through the
Office of Science, shall support a program of research and
development in catalysis science consistent with the De-
partment’s statutory authorities related to research and
development. The program shall include efforts to—
(1) enable catalyst design using combinations of
experimental and mechanistic methodologies coupled
with computational modeling of catalytic reactions at
the molecular level;
(2) develop techniques for high throughput syn-
thesis, assay, and characterization at nanometer and
subnanometer scales in situ under actual operating
conditions;
(3) synthesize catalysts with specific site archi-
tectures;
(4) conduct research on the use of precious
metals for catalysis; and
(5) translate molecular understanding to the
design of catalytic compounds.
(b) DUTIES OF THE OFFICE OF SCIENCE.—In car-
rying out the program under this section, the Director of
the Office of Science shall—
587
(1) support both individual investigators and
multidisciplinary teams of investigators to pioneer
new approaches in catalytic design;
(2) develop, plan, construct, acquire, share, or
operate special equipment or facilities for the use of
investigators in collaboration with national user fa-
cilities such as nanoscience and engineering centers;
(3) support technology transfer activities to
benefit industry and other users of catalysis science
and engineering; and
(4) coordinate research and development activi-
ties with industry and other Federal agencies.
(c) TRIENNIAL ASSESSMENT.—The National Acad-
emy of Sciences shall review the catalysis program every
3 years to report on gains made in the fundamental
science of catalysis and its progress towards developing
new fuels for energy production and material fabrication
processes.
SEC. 957. NANOSCALE SCIENCE AND ENGINEERING RE-
SEARCH, DEVELOPMENT, DEMONSTRATION,
AND COMMERCIAL APPLICATION.
(a) 
ESTABLISHMENT.—The 
Secretary, 
acting
through the Office of Science, shall support a program of
research, development, demonstration, and commercial ap-
plication in nanoscience and nanoengineering. The pro-
588
gram shall include efforts to further the understanding of
the chemistry, physics, materials science, and engineering
of phenomena on the scale of nanometers and to apply
that knowledge to the Department’s mission areas.
(b) DUTIES OF THE OFFICE OF SCIENCE.—In car-
rying out the program under this section, the Office of
Science shall—
(1) support both individual investigators and
teams of investigators, including multidisciplinary
teams;
(2) carry out activities under subsection (c);
(3) support technology transfer activities to
benefit industry and other users of nanoscience and
nanoengineering;
(4) coordinate research and development activi-
ties with other Department programs, industry, and
other Federal agencies;
(5) ensure that societal and ethical concerns
will be addressed as the technology is developed by—
(A) establishing a research program to
identify societal and ethical concerns related to
nanotechnology, and ensuring that the results
of such research are widely disseminated; and
589
(B) integrating, insofar as possible, re-
search on societal and ethical concerns with
nanotechnology research and development; and
(6) ensure that the potential of nanotechnology
to produce or facilitate the production of clean, inex-
pensive 
energy 
is 
realized 
by 
supporting
nanotechnology energy applications research and de-
velopment.
(c) NANOSCIENCE
AND
NANOENGINEERING
RE-
SEARCH CENTERS AND MAJOR INSTRUMENTATION.—
(1) IN
GENERAL.—The Secretary shall carry
out projects to develop, plan, construct, acquire, op-
erate, or support special equipment, instrumenta-
tion, or facilities for investigators conducting re-
search 
and 
development 
in 
nanoscience 
and
nanoengineering.
(2) ACTIVITIES.—Projects under paragraph (1)
may include the measurement of properties at the
scale of nanometers, manipulation at such scales,
and the integration of technologies based on
nanoscience or nanoengineering into bulk materials
or other technologies.
(3) FACILITIES.—Facilities under paragraph
(1) may include electron microcharacterization facili-
590
ties, microlithography facilities, scanning probe fa-
cilities, and related instrumentation.
(4) COLLABORATIONS.—The Secretary shall en-
courage collaborations among Department programs,
institutions of higher education, laboratories, and in-
dustry at facilities under this subsection.
SEC. 958. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY
MISSIONS.
(a) IN GENERAL.—The Secretary, acting through the
Office of Science, shall support a program to advance the
Nation’s computing capability across a diverse set of
grand challenge, computationally based, science problems
related to departmental missions.
(b) DUTIES OF THE OFFICE OF SCIENCE.—In car-
rying out the program under this section, the Office of
Science shall—
(1) advance basic science through computation
by developing software to solve grand challenge
science problems on new generations of computing
platforms in collaboration with other Department
program offices;
(2) enhance the foundations for scientific com-
puting by developing the basic mathematical and
computing systems software needed to take full ad-
vantage of the computing capabilities of computers
591
with peak speeds of 100 teraflops or more, some of
which may be unique to the scientific problem of in-
terest;
(3) enhance national collaboratory and net-
working capabilities by developing software to inte-
grate geographically separated researchers into ef-
fective research teams and to facilitate access to and
movement and analysis of large (petabyte) data sets;
(4) develop and maintain a robust scientific
computing hardware infrastructure to ensure that
the computing resources needed to address depart-
mental missions are available; and
(5) explore new computing approaches and
technologies that promise to advance scientific com-
puting, including developments in quantum com-
puting.
(c) HIGH-PERFORMANCE COMPUTING ACT OF 1991
AMENDMENTS.—The High-Performance Computing Act
of 1991 is amended—
(1) in section 4 (15 U.S.C. 5503)—
(A) in paragraph (3) by striking ‘‘means’’
and inserting ‘‘and networking and information
technology mean’’, and by striking ‘‘(including
vector supercomputers and large scale parallel
systems)’’; and
592
(B) in paragraph (4), by striking ‘‘packet
switched’’; and
(2) in section 203 (15 U.S.C. 5523)—
(A) in subsection (a), by striking all after
‘‘As part of the’’ and inserting ‘‘Networking
and Information Technology Research and De-
velopment Program, the Secretary of Energy
shall conduct basic and applied research in net-
working and information technology, with em-
phasis on supporting fundamental research in
the physical sciences and engineering, and en-
ergy applications; providing supercomputer ac-
cess and advanced communication capabilities
and facilities to scientific researchers; and de-
veloping tools for distributed scientific collabo-
ration.’’;
(B) in subsection (b), by striking ‘‘Pro-
gram’’ and inserting ‘‘Networking and Informa-
tion Technology Research and Development
Program’’; and
(C) by amending subsection (e) to read as
follows:
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary of En-
ergy to carry out the Networking and Information Tech-
593
nology Research and Development Program such sums as
may be necessary for fiscal years 2004 through 2008.’’.
(d) COORDINATION.—The Secretary shall ensure that
the program under this section is integrated and con-
sistent with—
(1) the Advanced Simulation and Computing
Program, formerly known as the Accelerated Stra-
tegic Computing Initiative, of the National Nuclear
Security Administration; and
(2) other national efforts related to advanced
scientific computing for science and engineering.
(e) REPORT.—
(1) IN GENERAL.—Before undertaking any new
initiative to develop any new advanced architecture
for high-speed computing, the Secretary, through the
Director of the Office of Science, shall transmit a re-
port to Congress describing—
(A) the expected duration and cost of the
initiative;
(B) the technical milestones the initiative
is designed to achieve;
(C) how institutions of higher education
and private firms will participate in the initia-
tive; and
594
(D) why the goals of the initiative could
not be achieved through existing programs.
(2) LIMITATION.—No funds may be expended
on any initiative described in paragraph (1) until 30
days after the report required by that paragraph is
transmitted to Congress.
SEC. 959. GENOMES TO LIFE PROGRAM.
(a) PROGRAM.—
(1) ESTABLISHMENT.—The Secretary shall es-
tablish a research, development, and demonstration
program in genetics, protein science, and computa-
tional biology to support the energy, national secu-
rity, and environmental mission of the Department.
(2) GRANTS.—The program shall support indi-
vidual investigators and multidisciplinary teams of
investigators through competitive, merit-reviewed
grants.
(3) CONSULTATION.—In carrying out the pro-
gram, the Secretary shall consult with other Federal
agencies that conduct genetic and protein research.
(b) GOALS.—The program shall have the goal of de-
veloping technologies and methods based on the biological
functions of genomes, microbes, and plants that—
(1) can facilitate the production of fuels, includ-
ing hydrogen;
595
(2) convert carbon dioxide to organic carbon;
(3) improve national security and combat ter-
rorism;
(4) detoxify soils and water at Department fa-
cilities contaminated with heavy metals and radio-
logical materials; and
(5) address other Department missions as iden-
tified by the Secretary.
(c) PLAN.—
(1) DEVELOPMENT OF PLAN.—Not later than 1
year after the date of enactment of this Act, the
Secretary shall prepare and transmit to Congress a
research plan describing how the program author-
ized pursuant to this section will be undertaken to
accomplish the program goals established in sub-
section (b).
(2) REVIEW
OF
PLAN.—The Secretary shall
contract with the National Academy of Sciences to
review the research plan developed under this sub-
section. The Secretary shall transmit the review to
Congress not later than 18 months after transmittal
of the research plan under paragraph (1), along with
the Secretary’s response to the recommendations
contained in the review.
596
(d) GENOMES TO LIFE USER FACILITIES AND AN-
CILLARY EQUIPMENT.—
(1) IN GENERAL.—Within the funds authorized
to be appropriated pursuant to this Act, the
amounts specified under section 951(b)(6) shall,
subject to appropriations, be available for projects to
develop, plan, construct, acquire, or operate special
equipment, instrumentation, or facilities for inves-
tigators conducting research, development, dem-
onstration, and commercial application in systems
biology and proteomics and associated biological dis-
ciplines.
(2) FACILITIES.—Facilities under paragraph
(1) may include facilities, equipment, or instrumen-
tation for—
(A) the production and characterization of
proteins;
(B) whole proteome analysis;
(C) characterization and imaging of molec-
ular machines; and
(D) analysis and modeling of cellular sys-
tems.
(3) COLLABORATIONS.—The Secretary shall en-
courage collaborations among universities, labora-
tories, and industry at facilities under this sub-
597
section. All facilities under this subsection shall have
a specific mission of technology transfer to other in-
stitutions.
(e) PROHIBITION ON BIOMEDICAL AND HUMAN CELL
AND HUMAN SUBJECT RESEARCH.—
(1) NO BIOMEDICAL RESEARCH.—In carrying
out the program under this section, the Secretary
shall not conduct biomedical research.
(2) LIMITATIONS.—Nothing in this section shall
authorize the Secretary to conduct any research or
demonstrations—
(A) on human cells or human subjects; or
(B) designed to have direct application
with respect to human cells or human subjects.
SEC. 960. FISSION AND FUSION ENERGY MATERIALS RE-
SEARCH PROGRAM.
In the President’s fiscal year 2006 budget request,
the Secretary shall establish a research and development
program on material science issues presented by advanced
fission reactors and the Department’s fusion energy pro-
gram. The program shall develop a catalog of material
properties required for these applications, develop theo-
retical models for materials possessing the required prop-
erties, benchmark models against existing data, and de-
598
velop a roadmap to guide further research and develop-
ment in this area.
SEC. 961. ENERGY-WATER SUPPLY PROGRAM.
(a) ESTABLISHMENT.—There is established within
the Department the Energy-Water Supply Program, to
study energy-related and certain other issues associated
with the supply of drinking water and operation of com-
munity water systems and to study water supply issues
related to energy.
(b) DEFINITIONS.—For the purposes of this section:
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency.
(2) AGENCY.—The term ‘‘Agency’’ means the
Environmental Protection Agency.
(3) FOUNDATION.—The term ‘‘Foundation’’
means the American Water Works Association Re-
search Foundation.
(4) INDIAN TRIBE.—The term ‘‘Indian tribe’’
has the meaning given the term in section 4 of the
Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450b).
(5) PROGRAM.—The term ‘‘Program’’ means
the Energy-Water Supply Program established by
this section.
599
(c) PROGRAM AREAS.—The Program shall develop
methods, means, procedures, equipment, and improved
technologies relating to—
(1) the arsenic removal program under sub-
section (d);
(2) the desalination program under subsection
(e); and
(3) the water and energy sustainability program
under subsection (f).
(d) ARSENIC REMOVAL PROGRAM.—
(1) IN GENERAL.—As soon as practicable after
the date of enactment of this Act, the Secretary, in
coordination with the Administrator and in partner-
ship with the Foundation, shall utilize the facilities,
institutions, and relationships established in the
Consolidated Appropriations Resolution, 2003 as de-
scribed in Senate Report 107–220 to carry out a re-
search program to provide innovative methods and
means for removal of arsenic.
(2) REQUIRED
EVALUATIONS.—The program
shall, to the maximum extent practicable, evaluate
the means of—
(A) reducing energy costs incurred in
using arsenic removal technologies;
600
(B) minimizing materials, operating, and
maintenance costs; and
(C) minimizing any quantities of waste (es-
pecially hazardous waste) that result from use
of arsenic removal technologies.
(3) PEER REVIEW.—Where applicable and rea-
sonably available, projects undertaken under this
subsection shall be peer-reviewed.
(4) COMMUNITY WATER SYSTEMS.—In carrying
out the program under this subsection, the Sec-
retary, in coordination with the Administrator,
shall—
(A) select projects involving a geographi-
cally and hydrologically diverse group of com-
munity water systems (as defined in section
1003 of the Public Health Service Act (42
U.S.C. 300)) and water chemistries, that have
experienced technical or economic difficulties in
providing drinking water with levels of arsenic
at 10 parts-per-billion or lower, which projects
shall be designed to develop innovative methods
and means to deliver drinking water that con-
tains less than 10 parts per billion of arsenic;
and
601
(B) provide not less than 40 percent of all
funds spent pursuant to this subsection to ad-
dress the needs of, and in collaboration with,
rural communities or Indian tribes.
(5) COST
EFFECTIVENESS.—The Foundation
shall create methods for determining cost effective-
ness of arsenic removal technologies used in the pro-
gram.
(6) 
EDUCATION, 
TRAINING, 
AND
TECH-
NOLOGY.—The Foundation shall include education,
training, and technology transfer as part of the pro-
gram.
(7) COORDINATION.—The Secretary shall con-
sult with the Administrator to ensure that all activi-
ties conducted under the program are coordinated
with the Agency and do not duplicate other pro-
grams in the Agency and other Federal agencies,
State programs, and academia.
(8) REPORTS.—Not later than 1 year after the
date of commencement of the program under this
subsection, and once every year thereafter, the Sec-
retary shall submit to the Committee on Energy and
Commerce of the House of Representatives and the
Committee on Environment and Public Works and
the Committee on Energy and Natural Resources of
602
the Senate a report on the results of the program
under this subsection.
(e) DESALINATION PROGRAM.—
(1) IN GENERAL.—The Secretary, in coopera-
tion with the Commissioner of Reclamation of the
Department of the Interior, shall carry out a pro-
gram to conduct research and develop methods and
means for desalination in accordance with the desali-
nation technology progress plan developed under
title II of the Energy and Water Development Ap-
propriations Act, 2002 (115 Stat. 498), and de-
scribed in Senate Report 107–39 under the heading
‘‘WATER AND RELATED RESOURCES’’ in the ‘‘BU-
REAU OF RECLAMATION’’ section.
(2) REQUIREMENTS.—The desalination pro-
gram shall—
(A) use the resources of the Department
and the Department of the Interior that were
involved in the development of the 2003 Na-
tional Desalination and Water Purification
Technology Roadmap for next-generation de-
salination technology;
(B) focus on technologies that are appro-
priate for use in desalinating brackish ground-
water, drinking water, wastewater and other sa-
603
line water supplies, or disposal of residual brine
or salt; and
(C) consider the use of renewable energy
sources.
(3) CONSTRUCTION
PROJECTS.—Funds made
available to carry out this subsection may be used
for construction projects, including completion of the
National Desalination Research Center for brackish
groundwater and ongoing operational costs of this
facility.
(4) STEERING COMMITTEE.—The Secretary and
the Commissioner of Reclamation of the Department
of the Interior shall jointly establish a steering com-
mittee for activities conducted under this subsection.
The steering committee shall be jointly chaired by 1
representative from the program and 1 representa-
tive from the Bureau of Reclamation.
(f) WATER
AND ENERGY SUSTAINABILITY PRO-
GRAM.—
(1) IN GENERAL.—The Secretary shall develop
a program to identify methods, means, procedures,
equipment, and improved technologies necessary to
ensure that sufficient quantities of water are avail-
able to meet energy needs and sufficient energy is
available to meet water needs.
604
(2) ASSESSMENTS.—In order to acquire infor-
mation and avoid duplication, the Secretary shall
work in collaboration with the Secretary of the Inte-
rior, the Army Corps of Engineers, the Adminis-
trator, the Secretary of Commerce, the Secretary of
Defense, relevant State agencies, nongovernmental
organizations, and academia, to assess—
(A) future water resources needed to sup-
port energy development and production within
the United States including water used for hy-
dropower, and production of, or electricity gen-
eration by, hydrogen, biomass, fossil fuels, and
nuclear fuel;
(B) future energy resources needed to sup-
port water purification and wastewater treat-
ment, including desalination and water convey-
ance;
(C) use of impaired and nontraditional
water supplies for energy production other than
oil and gas extraction;
(D) technology and programs for improv-
ing water use efficiency; and
(E) technologies to reduce water use in en-
ergy development and production.
(3) ROADMAP; TOOLS.—The Secretary shall—
605
(A) develop a program plan and technology
development roadmap for the Water and En-
ergy Sustainability Program to identify sci-
entific and technical requirements and activities
that are required to support planning for en-
ergy sustainability under current and potential
future conditions of water availability, use of
impaired water for energy production and other
uses, and reduction of water use in energy de-
velopment and production;
(B) develop tools for national and local en-
ergy and water sustainability planning, includ-
ing numerical models, decision analysis tools,
economic analysis tools, databases, and plan-
ning methodologies and strategies;
(C) implement at least 3 planning projects
involving energy development or production that
use the tools described in subparagraph (B)
and assess the viability of those tools at the
scale of river basins with at least 1 demonstra-
tion involving an international border; and
(D) transfer those tools to other Federal
agencies, State agencies, nonprofit organiza-
tions, industry, and academia.
606
(4) REPORT.—Not later than 1 year after the
date of enactment of this Act, the Secretary shall
submit to Congress a report on the Water and En-
ergy Sustainability Program that—
(A) includes the results of the assessment
under paragraph (2) and the program plan and
technology development roadmap; and
(B) identifies policy, legal, and institu-
tional issues related to water and energy sus-
tainability.
SEC. 962. NITROGEN FIXATION.
The Secretary, acting through the Office of Science,
shall support a program of research, development, dem-
onstration, and commercial application on biological nitro-
gen fixation, including plant genomics research relevant
to the development of commercial crop varieties with en-
hanced nitrogen fixation efficiency and ability.
Subtitle G—Energy and
Environment
SEC. 964. UNITED STATES-MEXICO ENERGY TECHNOLOGY
COOPERATION.
(a) PROGRAM.—The Secretary shall establish a re-
search, development, demonstration, and commercial ap-
plication program to be carried out in collaboration with
entities in Mexico and the United States to promote en-
607
ergy efficient, environmentally sound economic develop-
ment along the United States-Mexico border that mini-
mizes public health risks from industrial activities in the
border region.
(b) PROGRAM MANAGEMENT.—The program under
subsection (a) shall be managed by the Department of En-
ergy Carlsbad Environmental Management Field Office.
(c) TECHNOLOGY
TRANSFER.—In carrying out
projects and activities under this section, the Secretary
shall assess the applicability of technology developed under
the Environmental Management Science Program of the
Department.
(d) INTELLECTUAL PROPERTY.—In carrying out this
section, the Secretary shall comply with the requirements
of any agreement entered into between the United States
and Mexico regarding intellectual property protection.
(e) AUTHORIZATION OF APPROPRIATIONS.—The fol-
lowing sums are authorized to be appropriated to the Sec-
retary to carry out activities under this section:
(1) For each of fiscal years 2004 and 2005,
$5,000,000.
(2) For each of fiscal years 2006, 2007, and
2008, $6,000,000.
608
SEC. 965. WESTERN HEMISPHERE ENERGY COOPERATION.
(a) PROGRAM.—The Secretary shall carry out a pro-
gram to promote cooperation on energy issues with West-
ern Hemisphere countries.
(b) ACTIVITIES.—Under the program, the Secretary
shall fund activities to work with Western Hemisphere
countries to—
(1) assist the countries in formulating and
adopting changes in economic policies and other poli-
cies to—
(A) increase the production of energy sup-
plies; and
(B) improve energy efficiency; and
(2) assist in the development and transfer of
energy supply and efficiency technologies that would
have a beneficial impact on world energy markets.
(c) UNIVERSITY PARTICIPATION.—To the extent
practicable, the Secretary shall carry out the program
under this section with the participation of universities so
as to take advantage of the acceptance of universities by
Western Hemisphere countries as sources of unbiased
technical and policy expertise when assisting the Secretary
in—
(1) evaluating new technologies;
(2) resolving technical issues;
609
(3) working with those countries in the develop-
ment of new policies; and
(4) training policymakers, particularly in the
case of universities that involve the participation of
minority students, such as Hispanic-serving institu-
tions and Historically Black Colleges and Univer-
sities.
(d) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this
section—
(1) $8,000,000 for fiscal year 2004;
(2) $10,000,000 for fiscal year 2005;
(3) $13,000,000 for fiscal year 2006;
(4) $16,000,000 for fiscal year 2007; and
(5) $19,000,000 for fiscal year 2008.
SEC. 966. WASTE REDUCTION AND USE OF ALTERNATIVES.
(a) GRANT AUTHORITY.—The Secretary may make
a single grant to a qualified institution to examine and
develop the feasibility of burning post-consumer carpet in
cement kilns as an alternative energy source. The pur-
poses of the grant shall include determining—
(1) how post-consumer carpet can be burned
without disrupting kiln operations;
(2) the extent to which overall kiln emissions
may be reduced;
610
(3) the emissions of air pollutants and other
relevant environmental impacts; and
(4) how this process provides benefits to both
cement kiln operations and carpet suppliers.
(b) QUALIFIED INSTITUTION.—For the purposes of
subsection (a), a qualified institution is a research-inten-
sive institution of higher education with demonstrated ex-
pertise in the fields of fiber recycling and logistical mod-
eling of carpet waste collection and preparation.
(c) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary for car-
rying out this section $500,000.
SEC. 967. REPORT ON FUEL CELL TEST CENTER.
(a) REPORT.—Not later than 1 year after the date
of enactment of this Act, the Secretary shall transmit to
Congress a report on the results of a study of the estab-
lishment of a test center for next-generation fuel cells at
an institution of higher education that has available a con-
tinuous source of hydrogen and access to the electric
transmission grid. Such report shall include a conceptual
design for such test center and a projection of the costs
of establishing the test center.
(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary for car-
rying out this section $500,000.
611
SEC. 968. ARCTIC ENGINEERING RESEARCH CENTER.
(a) IN GENERAL.—The Secretary of Energy (referred
to in this section as the ‘‘Secretary’’) in consultation with
the Secretary of Transportation and the United States
Arctic Research Commission shall provide annual grants
to a university located adjacent to the Arctic Energy Of-
fice of the Department of Energy, to establish and operate
a university research center to be headquartered in Fair-
banks and to be known as the ‘‘Arctic Engineering Re-
search Center’’ (referred to in this section as the ‘‘Cen-
ter’’).
(b) PURPOSE.—The purpose of the Center shall be
to conduct research on, and develop improved methods of,
construction and use of materials to improve the overall
performance of roads, bridges, residential, commercial,
and industrial structures, and other infrastructure in the
Arctic region, with an emphasis on developing—
(1) new construction techniques for roads,
bridges, rail, and related transportation infrastruc-
ture and residential, commercial, and industrial in-
frastructure that are capable of withstanding the
Arctic environment and using limited energy re-
sources as efficiently as possible;
(2) technologies and procedures for increasing
road, bridge, rail, and related transportation infra-
structure and residential, commercial, and industrial
612
infrastructure safety, reliability, and integrity in the
Arctic region;
(3) new materials and improving the perform-
ance and energy efficiency of existing materials for
the construction of roads, bridges, rail, and related
transportation infrastructure and residential, com-
mercial, and industrial infrastructure in the Arctic
region; and
(4) recommendations for new local, regional,
and State permitting and building codes to ensure
transportation and building safety and efficient en-
ergy use when constructing, using, and occupying
such infrastructure in the Arctic region.
(c) OBJECTIVES.—The Center shall carry out—
(1) basic and applied research in the subjects
described in subsection (b), the products of which
shall be judged by peers or other experts in the field
to advance the body of knowledge in road, bridge,
rail, and infrastructure engineering in the Arctic re-
gion; and
(2) an ongoing program of technology transfer
that makes research results available to potential
users in a form that can be implemented.
(d) AMOUNT OF GRANT.—For each of fiscal years
2004 through 2009, the Secretary shall provide a grant
613
in the amount of $3,000,000 to the institution specified
in subsection (a) to carry out this section.
(e) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$3,000,000 for each of fiscal years 2004 through 2009.
SEC. 969. BARROW GEOPHYSICAL RESEARCH FACILITY.
(a) ESTABLISHMENT.—The Secretary of Commerce,
in consultation with the Secretaries of Energy and the In-
terior, the Director of the National Science Foundation,
and the Administrator of the Environmental Protection
Agency, shall establish a joint research facility in Barrow,
Alaska, to be known as the ‘‘Barrow Geophysical Research
Facility’’, to support scientific research activities in the
Arctic.
(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretaries of
Commerce, Energy, and the Interior, the Director of the
National Science Foundation, and the Administrator of
the Environmental Protection Agency for the planning,
design, construction, and support of the Barrow Geo-
physical Research Facility $61,000,000.
SEC. 970. WESTERN MICHIGAN DEMONSTRATION PROJECT.
The Administrator of the Environmental Protection
Agency, in consultation with the State of Michigan and
affected local officials, shall conduct a demonstration
614
project to address the effect of transported ozone and
ozone precursors in Southwestern Michigan. The dem-
onstration program shall address projected nonattainment
areas in Southwestern Michigan that include counties with
design values for ozone of less than .095 based on years
2000 to 2002 or the most current 3-year period of air
quality data. The Administrator shall assess any difficul-
ties such areas may experience in meeting the 8 hour na-
tional ambient air quality standard for ozone due to the
effect of transported ozone or ozone precursors into the
areas. The Administrator shall work with State and local
officials to determine the extent of ozone and ozone pre-
cursor transport, to assess alternatives to achieve compli-
ance with the 8 hour standard apart from local controls,
and to determine the timeframe in which such compliance
could take place. The Administrator shall complete this
demonstration project no later than 2 years after the date
of enactment of this section and shall not impose any re-
quirement or sanction that might otherwise apply during
the pendency of the demonstration project.
Subtitle H—Management
SEC. 971. AVAILABILITY OF FUNDS.
Funds authorized to be appropriated to the Depart-
ment under this title shall remain available until expended.
615
SEC. 972. COST SHARING.
(a) RESEARCH AND DEVELOPMENT.—Except as oth-
erwise provided in this title, for research and development
programs carried out under this title the Secretary shall
require a commitment from non-Federal sources of at
least 20 percent of the cost of the project. The Secretary
may reduce or eliminate the non-Federal requirement
under this subsection if the Secretary determines that the
research and development is of a basic or fundamental na-
ture or involves technical analyses or educational activi-
ties.
(b) DEMONSTRATION
AND COMMERCIAL APPLICA-
TION.—Except as otherwise provided in this title, the Sec-
retary shall require at least 50 percent of the costs directly
and specifically related to any demonstration or commer-
cial application project under this title to be provided from
non-Federal sources. The Secretary may reduce the non-
Federal requirement under this subsection if the Secretary
determines that the reduction is necessary and appropriate
considering the technological risks involved in the project
and is necessary to meet the objectives of this title.
(c) CALCULATION OF AMOUNT.—In calculating the
amount of the non-Federal commitment under subsection
(a) or (b), the Secretary may include personnel, services,
equipment, and other resources.
616
(d) SIZE OF NON-FEDERAL SHARE.—The Secretary
may consider the size of the non-Federal share in selecting
projects.
SEC. 973. MERIT REVIEW OF PROPOSALS.
Awards of funds authorized under this title shall be
made only after an impartial review of the scientific and
technical merit of the proposals for such awards has been
carried out by or for the Department.
SEC. 974. EXTERNAL TECHNICAL REVIEW OF DEPART-
MENTAL PROGRAMS.
(a) NATIONAL ENERGY RESEARCH AND DEVELOP-
MENT ADVISORY BOARDS.—
(1) IN GENERAL.—The Secretary shall establish
1 or more advisory boards to review Department re-
search, development, demonstration, and commercial
application programs in energy efficiency, renewable
energy, nuclear energy, and fossil energy.
(2) EXISTING
ADVISORY
BOARDS.—The Sec-
retary may designate an existing advisory board
within the Department to fulfill the responsibilities
of an advisory board under this subsection, and may
enter into appropriate arrangements with the Na-
tional Academy of Sciences to establish such an ad-
visory board.
(b) OFFICE OF SCIENCE ADVISORY COMMITTEES.—
617
(1) UTILIZATION OF EXISTING COMMITTEES.—
The Secretary shall continue to use the scientific
program advisory committees chartered under the
Federal Advisory Committee Act (5 U.S.C. App.) by
the Office of Science to oversee research and devel-
opment programs under that Office.
(2) SCIENCE ADVISORY COMMITTEE.—
(A) ESTABLISHMENT.—There shall be in
the Office of Science a Science Advisory Com-
mittee that includes the chairs of each of the
advisory committees described in paragraph (1).
(B) RESPONSIBILITIES.—The Science Ad-
visory Committee shall—
(i) serve as the science advisor to the
Director of the Office of Science;
(ii) advise the Director with respect to
the well-being and management of the Na-
tional Laboratories and single-purpose re-
search facilities;
(iii) advise the Director with respect
to education and workforce training activi-
ties required for effective short-term and
long-term basic and applied research ac-
tivities of the Office of Science; and
618
(iv) advise the Director with respect
to the well being of the university research
programs supported by the Office of
Science.
(c) MEMBERSHIP.—Each advisory board under this
section shall consist of persons with appropriate expertise
representing a diverse range of interests.
(d) MEETINGS
AND
PURPOSES.—Each advisory
board under this section shall meet at least semiannually
to review and advise on the progress made by the respec-
tive research, development, demonstration, and commer-
cial application program or programs. The advisory board
shall also review the measurable cost and performance-
based goals for such programs as established under sec-
tion 901(b), and the progress on meeting such goals.
(e) PERIODIC REVIEWS
AND ASSESSMENTS.—The
Secretary shall enter into appropriate arrangements with
the National Academy of Sciences to conduct periodic re-
views and assessments of the programs authorized by this
title, the measurable cost and performance-based goals for
such programs as established under section 901(b), if any,
and the progress on meeting such goals. Such reviews and
assessments shall be conducted every 5 years, or more
often as the Secretary considers necessary, and the Sec-
619
retary shall transmit to Congress reports containing the
results of all such reviews and assessments.
SEC. 975. IMPROVED COORDINATION OF TECHNOLOGY
TRANSFER ACTIVITIES.
(a) TECHNOLOGY TRANSFER COORDINATOR.—The
Secretary shall designate a Technology Transfer Coordi-
nator to perform oversight of and policy development for
technology transfer activities at the Department. The
Technology Transfer Coordinator shall—
(1) coordinate the activities of the Technology
Transfer Working Group;
(2) oversee the expenditure of funds allocated
to the Technology Transfer Working Group; and
(3) coordinate with each technology partnership
ombudsman appointed under section 11 of the Tech-
nology Transfer Commercialization Act of 2000 (42
U.S.C. 7261c).
(b) TECHNOLOGY TRANSFER WORKING GROUP.—
The Secretary shall establish a Technology Transfer
Working Group, which shall consist of representatives of
the National Laboratories and single-purpose research fa-
cilities, to—
(1) coordinate technology transfer activities oc-
curring at National Laboratories and single-purpose
research facilities;
620
(2) exchange information about technology
transfer practices, including alternative approaches
to resolution of disputes involving intellectual prop-
erty rights and other technology transfer matters;
and
(3) develop and disseminate to the public and
prospective technology partners information about
opportunities and procedures for technology transfer
with the Department, including those related to al-
ternative approaches to resolution of disputes involv-
ing intellectual property rights and other technology
transfer matters.
(c) TECHNOLOGY
TRANSFER
RESPONSIBILITY.—
Nothing in this section shall affect the technology transfer
responsibilities of Federal employees under the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C.
3701 et seq.).
SEC. 976. FEDERAL LABORATORY EDUCATIONAL PART-
NERS.
(a) DISTRIBUTION
OF ROYALTIES RECEIVED
BY
FEDERAL AGENCIES.—Section 14(a)(1)(B)(v) of the Ste-
venson-Wydler Technology Innovation Act of 1980 (15
U.S.C. 3710c(a)(1)(B)(v)), is amended to read as follows:
‘‘(v) for scientific research and develop-
ment and for educational assistance and other
621
purposes consistent with the missions and ob-
jectives of the agency and the laboratory.’’.
(b) COOPERATIVE RESEARCH AND DEVELOPMENT
AGREEMENTS.—Section 12(b)(5)(C) of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C.
3710a(b)(5)(C)) is amended to read as follows:
‘‘(C) for scientific research and development
and for educational assistance consistent with the
missions and objectives of the agency and the lab-
oratory.’’.
SEC. 977. INTERAGENCY COOPERATION.
The Secretary shall enter into discussions with the
Administrator of the National Aeronautics and Space Ad-
ministration with the goal of reaching an interagency
working agreement between the 2 agencies that would
make the National Aeronautics and Space Administra-
tion’s expertise in energy, gained from its existing and
planned programs, more readily available to the relevant
research, development, demonstration, and commercial ap-
plications programs of the Department. Technologies to
be discussed should include the National Aeronautics and
Space Administration’s modeling, research, development,
testing, and evaluation of new energy technologies, includ-
ing solar, wind, fuel cells, and hydrogen storage and dis-
tribution.
622
SEC. 978. TECHNOLOGY INFRASTRUCTURE PROGRAM.
(a) ESTABLISHMENT.—The Secretary shall establish
a Technology Infrastructure Program in accordance with
this section.
(b) PURPOSE.—The purpose of the Technology Infra-
structure Program shall be to improve the ability of Na-
tional Laboratories and single-purpose research facilities
to support departmental missions by—
(1) stimulating the development of technology
clusters that can support departmental missions at
the National Laboratories or single-purpose research
facilities;
(2) improving the ability of National Labora-
tories and single-purpose research facilities to lever-
age and benefit from commercial research, tech-
nology, products, processes, and services; and
(3) encouraging the exchange of scientific and
technological expertise between National Labora-
tories or single-purpose research facilities and enti-
ties that can support departmental missions at the
National Laboratories or single-purpose research fa-
cilities, such as institutions of higher education;
technology-related business concerns; nonprofit insti-
tutions; and agencies of State, tribal, or local gov-
ernments.
623
(c) PROJECTS.—The Secretary shall authorize the
Director of each National Laboratory or single-purpose re-
search facility to implement the Technology Infrastructure
Program at such National Laboratory or facility through
projects that meet the requirements of subsections (d) and
(e).
(d) PROGRAM REQUIREMENTS.—Each project funded
under this section shall meet the following requirements:
(1) Each project shall include at least 1 of each
of the following entities: a business; an institution of
higher education; a nonprofit institution; and an
agency of a State, local, or tribal government.
(2) Not less than 50 percent of the costs of
each project funded under this section shall be pro-
vided from non-Federal sources. The calculation of
costs paid by the non-Federal sources to a project
shall include cash, personnel, services, equipment,
and other resources expended on the project after
start of the project. Independent research and devel-
opment expenses of Government contractors that
qualify for reimbursement under section 31.205–
18(e) of the Federal Acquisition Regulation issued
pursuant to section 25(c)(1) of the Office of Federal
Procurement Policy Act (41 U.S.C. 421(c)(1)) may
be credited toward costs paid by non-Federal sources
624
to a project, if the expenses meet the other require-
ments of this section.
(3) All projects under this section shall be com-
petitively selected using procedures determined by
the Secretary.
(4) Any participant that receives funds under
this section may use generally accepted accounting
principles for maintaining accounts, books, and
records relating to the project.
(5) No Federal funds shall be made available
under this section for construction or any project for
more than 5 years.
(e) SELECTION CRITERIA.—
(1) IN GENERAL.—The Secretary shall allocate
funds under this section only if the Director of the
National Laboratory or single-purpose research facil-
ity managing the project determines that the project
is likely to improve the ability of the National Lab-
oratory or single-purpose research facility to achieve
technical success in meeting departmental missions.
(2) CRITERIA.—The Secretary shall consider
the following criteria in selecting a project to receive
Federal funds:
(A) The potential of the project to promote
the development of a commercially sustainable
625
technology cluster following the period of De-
partment investment, which will derive most of
the demand for its products or services from
the private sector, and which will support de-
partmental missions at the participating Na-
tional Laboratory or single-purpose research fa-
cility.
(B) The potential of the project to promote
the use of commercial research, technology,
products, processes, and services by the partici-
pating National Laboratory or single-purpose
research facility to achieve its mission or the
commercial development of technological inno-
vations made at the participating National Lab-
oratory or single-purpose research facility.
(C) The extent to which the project in-
volves a wide variety and number of institutions
of higher education, nonprofit institutions, and
technology-related business concerns that can
support the missions of the participating Na-
tional Laboratory or single-purpose research fa-
cility and that will make substantive contribu-
tions to achieving the goals of the project.
(D) The extent to which the project fo-
cuses on promoting the development of tech-
626
nology-related business concerns that are small
businesses or involves such small businesses
substantively in the project.
(E) Such other criteria as the Secretary
determines to be appropriate.
(f) ALLOCATION.—In allocating funds for projects
approved under this section, the Secretary shall provide—
(1) the Federal share of the project costs; and
(2) additional funds to the National Laboratory
or single-purpose research facility managing the
project to permit the National Laboratory or single-
purpose research facility to carry out activities relat-
ing to the project, and to coordinate such activities
with the project.
(g) REPORT TO CONGRESS.—Not later than July 1,
2006, the Secretary shall report to Congress on whether
the Technology Infrastructure Program should be contin-
ued and, if so, how the program should be managed.
(h) DEFINITIONS.—In this section:
(1) TECHNOLOGY CLUSTER.—The term ‘‘tech-
nology cluster’’ means a concentration of technology-
related business concerns, institutions of higher edu-
cation, or nonprofit institutions that reinforce each
other’s performance in the areas of technology devel-
opment through formal or informal relationships.
627
(2) TECHNOLOGY-RELATED
BUSINESS
CON-
CERN.—The term ‘‘technology-related business con-
cern’’ means a for-profit corporation, company, asso-
ciation, firm, partnership, or small business concern
that conducts scientific or engineering research; de-
velops new technologies; manufactures products
based on new technologies; or performs technological
services.
(i) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary for ac-
tivities under this section $10,000,000 for each of fiscal
years 2004, 2005, and 2006.
SEC. 979. REPROGRAMMING.
(a) DISTRIBUTION REPORT.—Not later than 60 days
after the date of the enactment of an Act appropriating
amounts authorized under this title, the Secretary shall
transmit to the appropriate authorizing committees of
Congress a report explaining how such amounts will be
distributed among the authorizations contained in this
title.
(b) PROHIBITION.—
(1) IN GENERAL.—No amount identified under
subsection (a) shall be reprogrammed if such re-
programming would result in an obligation which
changes an individual distribution required to be re-
628
ported under subsection (a) by more than 5 percent
unless the Secretary has transmitted to the appro-
priate authorizing committees of Congress a report
described in subsection (c) and a period of 30 days
has elapsed after such committees receive the report.
(2) COMPUTATION.—In the computation of the
30-day period described in paragraph (1), there shall
be excluded any day on which either House of Con-
gress is not in session because of an adjournment of
more than 3 days to a day certain.
(c) REPROGRAMMING REPORT.—A report referred to
in subsection (b)(1) shall contain a full and complete
statement of the action proposed to be taken and the facts
and circumstances relied on in support of the proposed
action.
SEC. 980. CONSTRUCTION WITH OTHER LAWS.
Except as otherwise provided in this title, the Sec-
retary shall carry out the research, development, dem-
onstration, 
and 
commercial 
application 
programs,
projects, and activities authorized by this title in accord-
ance with the applicable provisions of the Atomic Energy
Act of 1954 (42 U.S.C. 2011 et seq.), the Federal Non-
nuclear Research and Development Act of 1974 (42
U.S.C. 5901 et seq.), the Energy Policy Act of 1992 (42
U.S.C. 13201 et seq.), the Stevenson-Wydler Technology
629
Innovation Act of 1980 (15 U.S.C. 3701 et seq.), chapter
18 of title 35, United States Code (commonly referred to
as the Bayh-Dole Act), and any other Act under which
the Secretary is authorized to carry out such activities.
SEC. 981. REPORT ON RESEARCH AND DEVELOPMENT PRO-
GRAM EVALUATION METHODOLOGIES.
Not later than 180 days after the date of enactment
of this Act, the Secretary shall enter into appropriate ar-
rangements with the National Academy of Sciences to in-
vestigate and report on the scientific and technical merits
of any evaluation methodology currently in use or pro-
posed for use in relation to the scientific and technical pro-
grams of the Department by the Secretary or other Fed-
eral official. Not later than 6 months after receiving the
report of the National Academy, the Secretary shall sub-
mit such report to Congress, along with any other views
or plans of the Secretary with respect to the future use
of such evaluation methodology.
SEC. 982. DEPARTMENT OF ENERGY SCIENCE AND TECH-
NOLOGY SCHOLARSHIP PROGRAM.
(a) ESTABLISHMENT OF PROGRAM.—
(1) IN GENERAL.—The Secretary is authorized
to establish a Department of Energy Science and
Technology Scholarship Program to award scholar-
630
ships to individuals that is designed to recruit and
prepare students for careers in the Department.
(2) COMPETITIVE PROCESS.—Individuals shall
be selected to receive scholarships under this section
through a competitive process primarily on the basis
of academic merit, with consideration given to finan-
cial need and the goal of promoting the participation
of individuals identified in section 33 or 34 of the
Science and Engineering Equal Opportunities Act
(42 U.S.C. 1885a or 1885b).
(3) SERVICE AGREEMENTS.—To carry out the
Program the Secretary shall enter into contractual
agreements with individuals selected under para-
graph (2) under which the individuals agree to serve
as full-time employees of the Department, for the
period described in subsection (f)(1), in positions
needed by the Department and for which the individ-
uals are qualified, in exchange for receiving a schol-
arship.
(b) SCHOLARSHIP ELIGIBILITY.—In order to be eligi-
ble to participate in the Program, an individual must—
(1) be enrolled or accepted for enrollment as a
full-time student at an institution of higher edu-
cation in an academic program or field of study de-
631
scribed in the list made available under subsection
(d);
(2) be a United States citizen; and
(3) at the time of the initial scholarship award,
not be a Federal employee as defined in section
2105 of title 5 of the United States Code.
(c) APPLICATION REQUIRED.—An individual seeking
a scholarship under this section shall submit an applica-
tion to the Secretary at such time, in such manner, and
containing such information, agreements, or assurances as
the Secretary may require.
(d) ELIGIBLE ACADEMIC PROGRAMS.—The Secretary
shall make publicly available a list of academic programs
and fields of study for which scholarships under the Pro-
gram may be utilized, and shall update the list as nec-
essary.
(e) SCHOLARSHIP REQUIREMENT.—
(1) IN GENERAL.—The Secretary may provide a
scholarship under the Program for an academic year
if the individual applying for the scholarship has
submitted to the Secretary, as part of the applica-
tion required under subsection (c), a proposed aca-
demic program leading to a degree in a program or
field of study on the list made available under sub-
section (d).
632
(2) DURATION OF ELIGIBILITY.—An individual
may not receive a scholarship under this section for
more than 4 academic years, unless the Secretary
grants a waiver.
(3) 
SCHOLARSHIP
AMOUNT.—The 
dollar
amount of a scholarship under this section for an
academic year shall be determined under regulations
issued by the Secretary, but shall in no case exceed
the cost of attendance.
(4) AUTHORIZED
USES.—A scholarship pro-
vided under this section may be expended for tuition,
fees, and other authorized expenses as established by
the Secretary by regulation.
(5) CONTRACTS REGARDING DIRECT PAYMENTS
TO INSTITUTIONS.—The Secretary may enter into a
contractual agreement with an institution of higher
education under which the amounts provided for a
scholarship under this section for tuition, fees, and
other authorized expenses are paid directly to the in-
stitution with respect to which the scholarship is
provided.
(f) PERIOD OF OBLIGATED SERVICE.—
(1) DURATION
OF
SERVICE.—The period of
service for which an individual shall be obligated to
serve as an employee of the Department is, except
633
as provided in subsection (h)(2), 24 months for each
academic year for which a scholarship under this
section is provided.
(2) SCHEDULE FOR SERVICE.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), obligated service under para-
graph (1) shall begin not later than 60 days
after the individual obtains the educational de-
gree for which the scholarship was provided.
(B) DEFERRAL.—The Secretary may defer
the obligation of an individual to provide a pe-
riod of service under paragraph (1) if the Sec-
retary determines that such a deferral is appro-
priate. The Secretary shall prescribe the terms
and conditions under which a service obligation
may be deferred through regulation.
(g) PENALTIES
FOR
BREACH
OF
SCHOLARSHIP
AGREEMENT.—
(1) FAILURE TO COMPLETE ACADEMIC TRAIN-
ING.—Scholarship recipients who fail to maintain a
high level of academic standing, as defined by the
Secretary by regulation, who are dismissed from
their educational institutions for disciplinary rea-
sons, or who voluntarily terminate academic training
before graduation from the educational program for
634
which the scholarship was awarded, shall be in
breach of their contractual agreement and, in lieu of
any service obligation arising under such agreement,
shall be liable to the United States for repayment
not later than 1 year after the date of default of all
scholarship funds paid to them and to the institution
of higher education on their behalf under the agree-
ment, except as provided in subsection (h)(2). The
repayment period may be extended by the Secretary
when determined to be necessary, as established by
regulation.
(2) FAILURE
TO
BEGIN
OR
COMPLETE
THE
SERVICE
OBLIGATION
OR
MEET
THE
TERMS
AND
CONDITIONS OF DEFERMENT.—A scholarship recipi-
ent who, for any reason, fails to begin or complete
a service obligation under this section after comple-
tion of academic training, or fails to comply with the
terms and conditions of deferment established by the
Secretary pursuant to subsection (f)(2)(B), shall be
in breach of the contractual agreement. When a re-
cipient breaches an agreement for the reasons stated
in the preceding sentence, the recipient shall be lia-
ble to the United States for an amount equal to—
635
(A) the total amount of scholarships re-
ceived by such individual under this section;
plus
(B) the interest on the amounts of such
awards which would be payable if at the time
the awards were received they were loans bear-
ing interest at the maximum legal prevailing
rate, as determined by the Treasurer of the
United States,
multiplied by 3.
(h) WAIVER OR SUSPENSION OF OBLIGATION.—
(1) DEATH OF INDIVIDUAL.—Any obligation of
an individual incurred under the Program (or a con-
tractual agreement thereunder) for service or pay-
ment shall be canceled upon the death of the indi-
vidual.
(2) IMPOSSIBILITY OR EXTREME HARDSHIP.—
The Secretary shall by regulation provide for the
partial or total waiver or suspension of any obliga-
tion of service or payment incurred by an individual
under the Program (or a contractual agreement
thereunder) whenever compliance by the individual is
impossible or would involve extreme hardship to the
individual, or if enforcement of such obligation with
636
respect to the individual would be contrary to the
best interests of the Government.
(i) DEFINITIONS.—In this section the following defi-
nitions apply:
(1) COST OF ATTENDANCE.—The term ‘‘cost of
attendance’’ has the meaning given that term in sec-
tion 472 of the Higher Education Act of 1965 (20
U.S.C. 1087ll).
(2) PROGRAM.—The term ‘‘Program’’ means
the Department of Energy Science and Technology
Scholarship Program established under this section.
(j) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary for ac-
tivities under this section—
(1) for fiscal year 2004, $800,000;
(2) for fiscal year 2005, $1,600,000;
(3) for fiscal year 2006, $2,000,000;
(4) for fiscal year 2007, $2,000,000; and
(5) for fiscal year 2008, $2,000,000.
SEC. 983. REPORT ON EQUAL EMPLOYMENT OPPORTUNITY
PRACTICES.
Not later than 12 months after the date of enactment
of this Act, and biennially thereafter, the Secretary shall
transmit to Congress a report on the equal employment
637
opportunity practices at National Laboratories. Such re-
port shall include—
(1) a thorough review of each laboratory con-
tractor’s equal employment opportunity policies, in-
cluding promotion to management and professional
positions and pay raises;
(2) a statistical report on complaints and their
disposition in the laboratories;
(3) a description of how equal employment op-
portunity practices at the laboratories are treated in
the contract and in calculating award fees for each
contractor;
(4) a summary of disciplinary actions and their
disposition by either the Department or the relevant
contractors for each laboratory;
(5) a summary of outreach efforts to attract
women and minorities to the laboratories;
(6) a summary of efforts to retain women and
minorities in the laboratories; and
(7) a summary of collaboration efforts with the
Office of Federal Contract Compliance Programs to
improve equal employment opportunity practices at
the laboratories.
638
SEC. 984. SMALL BUSINESS ADVOCACY AND ASSISTANCE.
(a) SMALL BUSINESS ADVOCATE.—The Secretary
shall require the Director of each National Laboratory,
and may require the Director of a single-purpose research
facility, to designate a small business advocate to—
(1) increase the participation of small business
concerns, including socially and economically dis-
advantaged small business concerns, in procurement,
collaborative research, technology licensing, and
technology transfer activities conducted by the Na-
tional Laboratory or single-purpose research facility;
(2) report to the Director of the National Lab-
oratory or single-purpose research facility on the ac-
tual participation of small business concerns, includ-
ing socially and economically disadvantaged small
business concerns, in procurement, collaborative re-
search, technology licensing, and technology transfer
activities along with recommendations, if appro-
priate, on how to improve participation;
(3) make available to small businesses training,
mentoring, and information on how to participate in
procurement and collaborative research activities;
(4) increase the awareness inside the National
Laboratory or single-purpose research facility of the
capabilities and opportunities presented by small
business concerns; and
639
(5) establish guidelines for the program under
subsection (b) and report on the effectiveness of
such program to the Director of the National Lab-
oratory or single-purpose research facility.
(b) ESTABLISHMENT OF SMALL BUSINESS ASSIST-
ANCE PROGRAM.—The Secretary shall require the Direc-
tor of each National Laboratory, and may require the Di-
rector of a single-purpose research facility, to establish a
program to provide small business concerns—
(1) assistance directed at making them more ef-
fective and efficient subcontractors or suppliers to
the National Laboratory or single-purpose research
facility; or
(2) general technical assistance, the cost of
which shall not exceed $10,000 per instance of as-
sistance, to improve the small business concerns’
products or services.
(c) USE OF FUNDS.—None of the funds expended
under subsection (b) may be used for direct grants to the
small business concerns.
(d) DEFINITIONS.—In this section:
(1) SMALL
BUSINESS
CONCERN.—The term
‘‘small business concern’’ has the meaning given
such term in section 3 of the Small Business Act
(15 U.S.C. 632).
640
(2) SOCIALLY AND ECONOMICALLY DISADVAN-
TAGED SMALL BUSINESS CONCERNS.—The term ‘‘so-
cially and economically disadvantaged small business
concerns’’ has the meaning given such term in sec-
tion 8(a)(4) of the Small Business Act (15 U.S.C.
637(a)(4)).
(e) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary for ac-
tivities under this section $5,000,000 for each of fiscal
years 2004 through 2008.
SEC. 985. REPORT ON MOBILITY OF SCIENTIFIC AND TECH-
NICAL PERSONNEL.
Not later than 2 years after the date of enactment
of this Act, the Secretary shall transmit a report to Con-
gress identifying any policies or procedures of a contractor
operating a National Laboratory or single-purpose re-
search facility that create disincentives to the temporary
transfer of scientific and technical personnel among the
contractor-operated National Laboratories or contractor-
operated single-purpose research facilities and provide
suggestions for improving interlaboratory exchange of sci-
entific and technical personnel.
SEC. 986. NATIONAL ACADEMY OF SCIENCES REPORT.
Not later than 90 days after the date of enactment
of this Act, the Secretary shall enter into an arrangement
641
with the National Academy of Sciences for the Academy
to—
(1) conduct a study on—
(A) the obstacles to accelerating the com-
mercial application of energy technology; and
(B) the adequacy of Department policies
and procedures for, and oversight of, technology
transfer-related disputes between contractors of
the Department and the private sector; and
(2) transmit a report to Congress on rec-
ommendations developed as a result of the study.
SEC. 987. OUTREACH.
The Secretary shall ensure that each program au-
thorized by this title includes an outreach component to
provide information, as appropriate, to manufacturers,
consumers, engineers, architects, builders, energy service
companies, institutions of higher education, small busi-
nesses, facility planners and managers, State and local
governments, and other entities.
SEC. 988. COMPETITIVE AWARD OF MANAGEMENT CON-
TRACTS.
None of the funds authorized to be appropriated to
the Secretary by this title may be used to award a manage-
ment and operating contract for a nonmilitary energy lab-
oratory of the Department unless such contract is com-
642
petitively awarded or the Secretary grants, on a case-by-
case basis, a waiver to allow for such a deviation. The Sec-
retary may not delegate the authority to grant such a
waiver and shall submit to Congress a report notifying
Congress of the waiver and setting forth the reasons for
the waiver at least 60 days prior to the date of the award
of such a contract.
SEC. 989. EDUCATIONAL PROGRAMS IN SCIENCE AND
MATHEMATICS.
(a) ACTIVITIES.—Section 3165(a) of the Department
of Energy Science Education Enhancement Act (42
U.S.C. 7381b(a)) is amended by adding at the end the
following:
‘‘(14) Support competitive events for students,
under supervision of teachers, designed to encourage
student interest and knowledge in science and math-
ematics.’’.
(b) AUTHORIZATION OF APPROPRIATIONS.—Section
3169 of the Department of Energy Science Education En-
hancement Act (42 U.S.C. 7381e), as so redesignated by
section 1102(b), is amended by inserting before the period
‘‘; and $40,000,000 for each of fiscal years 2004 through
2008’’.
643
TITLE X—DEPARTMENT OF
ENERGY MANAGEMENT
SEC. 1001. ADDITIONAL ASSISTANT SECRETARY POSITION.
(a) ADDITIONAL ASSISTANT SECRETARY POSITION
TO ENABLE IMPROVED MANAGEMENT OF NUCLEAR EN-
ERGY ISSUES.—
(1) IN GENERAL.—Section 203(a) of the De-
partment of Energy Organization Act (42 U.S.C.
7133(a)) is amended by striking ‘‘six Assistant Sec-
retaries’’ and inserting ‘‘7 Assistant Secretaries’’.
(2) SENSE OF CONGRESS.—It is the sense of
Congress that the leadership for departmental mis-
sions in nuclear energy should be at the Assistant
Secretary level.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) TITLE 5.—Section 5315 of title 5, United
States Code, is amended by striking ‘‘Assistant Sec-
retaries of Energy (6)’’ and inserting ‘‘Assistant
Secretaries of Energy (7)’’.
(2) DEPARTMENT OF ENERGY ORGANIZATION
ACT.—The table of contents for the Department of
Energy Organization Act (42 U.S.C. 7101 note) is
amended—
(A) by striking ‘‘Section 209’’ and insert-
ing ‘‘Sec. 209’’;
644
(B) by striking ‘‘213.’’ and inserting ‘‘Sec.
213.’’;
(C) by striking ‘‘214.’’ and inserting ‘‘Sec.
214.’’;
(D) by striking ‘‘215.’’ and inserting ‘‘Sec.
215.’’; and
(E) by striking ‘‘216.’’ and inserting ‘‘Sec.
216.’’.
SEC. 1002. OTHER TRANSACTIONS AUTHORITY.
Section 646 of the Department of Energy Organiza-
tion Act (42 U.S.C. 7256) is amended by adding at the
end the following:
‘‘(g)(1) In addition to other authorities granted to the
Secretary under law, the Secretary may enter into other
transactions on such terms as the Secretary may deem
appropriate in furtherance of research, development, or
demonstration functions vested in the Secretary. Such
other transactions shall not be subject to the provisions
of section 9 of the Federal Nonnuclear Energy Research
and Development Act of 1974 (42 U.S.C. 5908) or section
152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182).
‘‘(2)(A) The Secretary shall ensure that—
‘‘(i) to the maximum extent the Secretary de-
termines practicable, no transaction entered into
under paragraph (1) provides for research, develop-
645
ment, or demonstration that duplicates research, de-
velopment, or demonstration being conducted under
existing projects carried out by the Department;
‘‘(ii) to the extent the Secretary determines
practicable, the funds provided by the Government
under a transaction authorized by paragraph (1) do
not exceed the total amount provided by other par-
ties to the transaction; and
‘‘(iii) to the extent the Secretary determines
practicable, competitive, merit-based selection proce-
dures shall be used when entering into transactions
under paragraph (1).
‘‘(B) A transaction authorized by paragraph (1) may
be used for a research, development, or demonstration
project only if the Secretary makes a written determina-
tion that the use of a standard contract, grant, or coopera-
tive agreement for the project is not feasible or appro-
priate.
‘‘(3)(A) The Secretary shall protect from disclosure,
including disclosure under section 552 of title 5, United
States Code, for up to 5 years after the date the informa-
tion is received by the Secretary—
‘‘(i) a proposal, proposal abstract, and sup-
porting documents submitted to the Department in
a competitive or noncompetitive process having the
646
potential for resulting in an award under paragraph
(1) to the party submitting the information; and
‘‘(ii) a business plan and technical information
relating to a transaction authorized by paragraph
(1) submitted to the Department as confidential
business information.
‘‘(B) The Secretary may protect from disclosure, for
up to 5 years after the information was developed, any
information developed pursuant to a transaction under
paragraph (1) which developed information is of a char-
acter that it would be protected from disclosure under sec-
tion 552(b)(4) of title 5, United States Code, if obtained
from a person other than a Federal agency.
‘‘(4) Not later than 90 days after the date of enact-
ment of this subsection, the Secretary shall prescribe
guidelines for using other transactions authorized by para-
graph (1). Such guidelines shall be published in the Fed-
eral Register for public comment under rulemaking proce-
dures of the Department.
‘‘(5) The authority of the Secretary under this sub-
section may be delegated only to an officer of the Depart-
ment who is appointed by the President by and with the
advice and consent of the Senate and may not be delegated
to any other person.
647
‘‘(6)(A) Not later than September 31, 2005, the
Comptroller General of the United States shall report to
Congress on the Department’s use of the authorities
granted under this section, including the ability to attract
nontraditional government contractors and whether addi-
tional safeguards are needed with respect to the use of
such authorities.
‘‘(B) In this section, the term ‘nontraditional Govern-
ment contractor’ has the same meaning as the term ‘non-
traditional defense contractor’ as defined in section 845(e)
of the National Defense Authorization Act for Fiscal Year
1994 (Public Law 103–160; 10 U.S.C. 2371 note).’’.
TITLE XI—PERSONNEL AND
TRAINING
SEC. 1101. TRAINING GUIDELINES FOR ELECTRIC ENERGY
INDUSTRY PERSONNEL.
The Secretary of Energy, in consultation with the
Secretary of Labor and jointly with the electric industry
and recognized employee representatives, shall develop
model personnel training guidelines to support electric sys-
tem reliability and safety. The training guidelines shall,
at a minimum—
(1) include training requirements for workers
engaged in the construction, operation, inspection,
and maintenance of electric generation, trans-
648
mission, and distribution, including competency and
certification requirements, and assessment require-
ments that include initial and ongoing evaluation of
workers, recertification assessment procedures, and
methods for examining or testing the qualification of
individuals performing covered tasks; and
(2) consolidate existing training guidelines on
the construction, operation, maintenance, and in-
spection of electric generation, transmission, and
distribution facilities, such as those established by
the National Electric Safety Code and other indus-
try consensus standards.
SEC. 1102. IMPROVED ACCESS TO ENERGY-RELATED SCI-
ENTIFIC AND TECHNICAL CAREERS.
(a) DEPARTMENT OF ENERGY SCIENCE EDUCATION
PROGRAMS.—Section 3164 of the Department of Energy
Science Education Enhancement Act (42 U.S.C. 7381a)
is amended by adding at the end the following:
‘‘(c) PROGRAMS FOR STUDENTS FROM UNDERREP-
RESENTED GROUPS.—In carrying out a program under
subsection (a), the Secretary shall give priority to activi-
ties that are designed to encourage students from under-
represented groups to pursue scientific and technical ca-
reers.’’.
649
(b) PARTNERSHIPS WITH HISTORICALLY BLACK
COLLEGES AND UNIVERSITIES, HISPANIC-SERVICING IN-
STITUTIONS, AND TRIBAL COLLEGES.—The Department
of Energy Science Education Enhancement Act (42
U.S.C. 7381 et seq.) is amended—
(1) by redesignating sections 3167 and 3168 as
sections 3168 and 3169, respectively; and
(2) by inserting after section 3166 the fol-
lowing:
‘‘SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK
COLLEGES AND UNIVERSITIES, HISPANIC-
SERVING INSTITUTIONS, AND TRIBAL COL-
LEGES.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) 
HISPANIC-SERVING
INSTITUTION.—The
term ‘Hispanic-serving institution’ has the meaning
given that term in section 502(a) of the Higher
Education Act of 1965 (20 U.S.C. 1101a(a)).
‘‘(2) HISTORICALLY BLACK COLLEGE OR UNI-
VERSITY.—The term ‘historically Black college or
university’ has the meaning given the term ‘part B
institution’ in section 322 of the Higher Education
Act of 1965 (20 U.S.C. 1061).
650
‘‘(3) NATIONAL LABORATORY.—The term ‘Na-
tional Laboratory’ has the meaning given that term
in section 902 of the Energy Policy Act of 2003.
‘‘(4) SCIENCE FACILITY.—The term ‘science fa-
cility’ has the meaning given the term ‘single-pur-
pose research facility’ in section 902 of the Energy
Policy Act of 2003.
‘‘(5) TRIBAL COLLEGE.—The term ‘tribal col-
lege’ has the meaning given the term ‘Tribal College
or University’ in section 316(b)(3) of the Higher
Education Act of 1965 (20 U.S.C. 1059c(b)(3)).
‘‘(b) EDUCATION
PARTNERSHIP.—The Secretary
shall direct the Director of each National Laboratory and,
to the extent practicable, the head of any science facility
to increase the participation of historically Black colleges
or universities, Hispanic-serving institutions, or tribal col-
leges in activities that increase the capacity of the histori-
cally Black colleges or universities, Hispanic-serving insti-
tutions, or tribal colleges to train personnel in science or
engineering.
‘‘(c) ACTIVITIES.—An activity under subsection (b)
may include—
‘‘(1) collaborative research;
‘‘(2) equipment transfer;
651
‘‘(3) training activities conducted at a National
Laboratory or science facility; and
‘‘(4) mentoring activities conducted at a Na-
tional Laboratory or science facility.
‘‘(d) REPORT.—Not later than 2 years after the date
of enactment of the Energy Policy Act of 2003, the Sec-
retary shall submit to Congress a report on the activities
carried out under this section.’’.
SEC. 1103. NATIONAL POWER PLANT OPERATIONS TECH-
NOLOGY AND EDUCATION CENTER.
(a) ESTABLISHMENT.—The Secretary shall support
the establishment of a National Power Plant Operations
Technology and Education Center (in this section referred
to as the ‘‘Center’’), to address the need for training and
educating certified operators for nonnuclear electric power
generation plants.
(b) ROLE.—The Center shall provide both training
and continuing education relating to nonnuclear electric
power generation plant technologies and operations. The
Center shall conduct training and education activities on
site and through Internet-based information technologies
that allow for learning at remote sites.
(c) CRITERIA FOR COMPETITIVE SELECTION.—The
Secretary shall support the establishment of the Center
at an institution of higher education with expertise in
652
power plant technology and operation and with the ability
to provide onsite as well as Internet-based training.
SEC. 1104. INTERNATIONAL ENERGY TRAINING.
(a) IN GENERAL.—The Secretary of Energy, in con-
sultation with the Secretaries of Commerce, Interior, and
State and the Federal Energy Regulatory Commission,
shall coordinate training and outreach efforts for inter-
national commercial energy markets in countries with de-
veloping and restructuring economies.
(b) COMPONENTS.—The efforts may address—
(1) production-related fiscal regimes;
(2) grid and network issues;
(3) energy user and demand side response;
(4) international trade of energy; and
(5) international transportation of energy.
(c) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$1,500,000 for each of fiscal years 2004 through 2007.
TITLE XII—ELECTRICITY
SEC. 1201. SHORT TITLE.
This title may be cited as the ‘‘Electric Reliability
Act of 2004’’.
653
Subtitle A—Reliability Standards
SEC. 1211. ELECTRIC RELIABILITY STANDARDS.
(a) IN GENERAL.—Part II of the Federal Power Act
(16 U.S.C 824 et seq.) is amended by adding at the end
the following:
‘‘SEC. 215. ELECTRIC RELIABILITY.
‘‘(a) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘bulk-power system’ means—
‘‘(A) facilities and control systems nec-
essary for operating an interconnected electric
energy transmission network (or any portion
thereof); and
‘‘(B) electric energy from generation facili-
ties needed to maintain transmission system re-
liability.
The term does not include facilities used in the local
distribution of electric energy.
‘‘(2) The terms ‘Electric Reliability Organiza-
tion’ and ‘ERO’ mean the organization certified by
the Commission under subsection (c) the purpose of
which is to establish and enforce reliability stand-
ards for the bulk-power system, subject to Commis-
sion review.
‘‘(3) The term ‘reliability standard’ means a re-
quirement, approved by the Commission under this
654
section, to provide for reliable operation of the bulk-
power system. The term includes requirements for
the operation of existing bulk-power system facilities
and the design of planned additions or modifications
to such facilities to the extent necessary to provide
for reliable operation of the bulk-power system, but
the term does not include any requirement to en-
large such facilities or to construct new transmission
capacity or generation capacity.
‘‘(4) The term ‘reliable operation’ means oper-
ating the elements of the bulk-power system within
equipment and electric system thermal, voltage, and
stability limits so that instability, uncontrolled sepa-
ration, or cascading failures of such system will not
occur as a result of a sudden disturbance or unan-
ticipated failure of system elements.
‘‘(5) The term ‘Interconnection’ means a geo-
graphic area in which the operation of bulk-power
system components is synchronized such that the
failure of 1 or more of such components may ad-
versely affect the ability of the operators of other
components within the system to maintain reliable
operation of the facilities within their control.
‘‘(6) The term ‘transmission organization’
means a Regional Transmission Organization, Inde-
655
pendent System Operator, independent transmission
provider, or other transmission organization finally
approved by the Commission for the operation of
transmission facilities.
‘‘(7) The term ‘regional entity’ means an entity
having enforcement authority pursuant to subsection
(e)(4).
‘‘(b) JURISDICTION AND APPLICABILITY.—(1) The
Commission shall have jurisdiction, within the United
States, over the ERO certified by the Commission under
subsection (c), any regional entities, and all users, owners
and operators of the bulk-power system, including but not
limited to the entities described in section 201(f), for pur-
poses of approving reliability standards established under
this section 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.
‘‘(2) The Commission shall issue a final rule to imple-
ment the requirements of this section not later than 180
days after the date of enactment of this section.
‘‘(c) CERTIFICATION.—Following the issuance of a
Commission rule under subsection (b)(2), any person may
submit an application to the Commission for certification
as the Electric Reliability Organization. The Commission
656
may certify 1 such ERO if the Commission determines
that such ERO—
‘‘(1) has the ability to develop and enforce, sub-
ject to subsection (e)(2), reliability standards that
provide for an adequate level of reliability of the
bulk-power system; and
‘‘(2) has established rules that—
‘‘(A) assure its independence of the users
and owners and operators of the bulk-power
system, while assuring fair stakeholder rep-
resentation in the selection of its directors and
balanced decisionmaking in any ERO com-
mittee or subordinate organizational structure;
‘‘(B) allocate equitably reasonable dues,
fees, and other charges among end users for all
activities under this section;
‘‘(C) provide fair and impartial procedures
for enforcement of reliability standards through
the imposition of penalties in accordance with
subsection (e) (including limitations on activi-
ties, functions, or operations, or other appro-
priate sanctions);
‘‘(D) provide for reasonable notice and op-
portunity for public comment, due process,
openness, and balance of interests in developing
657
reliability standards and otherwise exercising its
duties; and
‘‘(E) provide for taking, after certification,
appropriate steps to gain recognition in Canada
and Mexico.
‘‘(d) RELIABILITY STANDARDS.—(1) The Electric
Reliability Organization shall file each reliability standard
or modification to a reliability standard that it proposes
to be made effective under this section with the Commis-
sion.
‘‘(2) The Commission may approve, by rule or order,
a proposed reliability standard or modification to a reli-
ability 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 technical expertise of the Electric Reliability
Organization with respect to the content of a proposed
standard or modification to a reliability standard and to
the technical expertise of a regional entity organized on
an Interconnection-wide basis with respect to a reliability
standard to be applicable within that Interconnection, but
shall not defer with respect to the effect of a standard
on competition. A proposed standard or modification shall
take effect upon approval by the Commission.
658
‘‘(3) The Electric Reliability Organization 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 ap-
plicable on an Interconnection-wide basis is just, reason-
able, and not unduly discriminatory or preferential, and
in the public interest.
‘‘(4) The Commission shall remand to the Electric
Reliability Organization for further consideration a pro-
posed reliability standard or a modification to a reliability
standard that the Commission disapproves in whole or in
part.
‘‘(5) The Commission, upon its own motion or upon
complaint, may order the Electric Reliability Organization
to submit to the Commission a proposed reliability stand-
ard or a modification to a reliability standard that ad-
dresses a specific matter if the Commission considers such
a new or modified reliability standard appropriate to carry
out this section.
‘‘(6) The final rule adopted under subsection (b)(2)
shall include fair processes for the identification and time-
ly resolution of any conflict between a reliability standard
and any function, rule, order, tariff, rate schedule, or
agreement accepted, approved, or ordered by the Commis-
sion applicable to a transmission organization. Such trans-
659
mission organization shall continue to comply with such
function, rule, order, tariff, rate schedule or agreement ac-
cepted approved, or ordered by the Commission until—
‘‘(A) the Commission finds a conflict exists be-
tween a reliability standard and any such provision;
‘‘(B) the Commission orders a change to such
provision pursuant to section 206 of this part; and
‘‘(C) the ordered change becomes effective
under this part.
If the Commission determines that a reliability standard
needs to be changed as a result of such a conflict, it shall
order the ERO to develop and file with the Commission
a modified reliability standard under paragraph (4) or (5)
of this subsection.
‘‘(e) ENFORCEMENT.—(1) The ERO may impose,
subject to paragraph (2), a penalty on a user or owner
or operator of the bulk-power system for a violation of a
reliability standard approved by the Commission under
subsection (d) if the ERO, after notice and an opportunity
for a hearing—
‘‘(A) finds that the user or owner or operator
has violated a reliability standard approved by the
Commission under subsection (d); and
‘‘(B) files notice and the record of the pro-
ceeding with the Commission.
660
‘‘(2) A penalty imposed under paragraph (1) may
take effect not earlier than the 31st day after the ERO
files with the Commission notice of the penalty and the
record of proceedings. Such penalty shall be subject to re-
view by the Commission, on its own motion or upon appli-
cation by the user, owner or operator that is the subject
of the penalty filed within 30 days after the date such
notice is filed with the Commission. Application to the
Commission for review, or the initiation of review by the
Commission on its own motion, shall not operate as a stay
of such penalty unless the Commission otherwise orders
upon its own motion or upon application by the user,
owner or operator that is the subject of such penalty. In
any proceeding to review a penalty imposed under para-
graph (1), the Commission, after notice and opportunity
for hearing (which hearing may consist solely of the record
before the ERO and opportunity for the presentation of
supporting reasons to affirm, modify, or set aside the pen-
alty), shall by order affirm, set aside, reinstate, or modify
the penalty, and, if appropriate, remand to the ERO for
further proceedings. The Commission shall implement ex-
pedited procedures for such hearings.
‘‘(3) 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-
661
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 en-
gaged or is about to engage in any acts or practices that
constitute or will constitute a violation of a reliability
standard.
‘‘(4) The Commission shall issue regulations author-
izing the ERO to enter into an agreement to delegate au-
thority to a regional entity for the purpose of proposing
reliability standards to the ERO and enforcing reliability
standards under paragraph (1) if—
‘‘(A) the regional entity is governed by—
‘‘(i) an independent board;
‘‘(ii) a balanced stakeholder board; or
‘‘(iii) a combination independent and
balanced stakeholder board.
‘‘(B) the regional entity otherwise satisfies the
provisions of subsection (c)(1) and (2); and
‘‘(C) the agreement promotes effective and effi-
cient administration of bulk-power system reliability.
The Commission may modify such delegation. The ERO
and the Commission shall rebuttably presume that a pro-
posal for delegation to a regional entity organized on an
Interconnection-wide basis promotes effective and efficient
administration of bulk-power system reliability and should
662
be approved. Such regulation may provide that the Com-
mission may assign the ERO’s authority to enforce reli-
ability standards under paragraph (1) directly to a re-
gional entity consistent with the requirements of this para-
graph.
‘‘(5) The Commission may take such action as is nec-
essary or appropriate against the ERO or a regional entity
to ensure compliance with a reliability standard or any
Commission order affecting the ERO or a regional entity.
‘‘(6) Any penalty imposed under this section shall
bear a reasonable relation to the seriousness of the viola-
tion and shall take into consideration the efforts of such
user, owner, or operator to remedy the violation in a time-
ly manner.
‘‘(f) CHANGES IN ELECTRIC RELIABILITY ORGANIZA-
TION RULES.—The 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 ERO. 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, rea-
sonable, not unduly discriminatory or preferential, is in
663
the public interest, and satisfies the requirements of sub-
section (c).
‘‘(g) RELIABILITY REPORTS.—The ERO shall con-
duct periodic assessments of the reliability and adequacy
of the bulk-power system in North America.
‘‘(h) COORDINATION WITH CANADA AND MEXICO.—
The President is urged to negotiate international agree-
ments with the governments of Canada and Mexico to pro-
vide for effective compliance with reliability standards and
the effectiveness of the ERO in the United States and
Canada or Mexico.
‘‘(i) SAVINGS PROVISIONS.—(1) The ERO shall have
authority to develop and enforce compliance with reli-
ability standards for only the bulk-power system.
‘‘(2) This section does not authorize the ERO or the
Commission to order the construction of additional gen-
eration or transmission capacity or to set and enforce com-
pliance with standards for adequacy or safety of electric
facilities or services.
‘‘(3) Nothing in this section shall be construed to pre-
empt any authority of any State to take action to ensure
the safety, adequacy, and reliability of electric service
within that State, as long as such action is not incon-
sistent with any reliability standard.
664
‘‘(4) Within 90 days of the application of the Electric
Reliability Organization or other affected party, and after
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 ERO.
‘‘(5) The Commission, after consultation with the
ERO and the State taking action, may stay the effective-
ness of any State action, pending the Commission’s
issuance of a final order.
‘‘(j) REGIONAL ADVISORY BODIES.—The Commis-
sion shall establish a regional advisory body on the petition
of at least 2⁄3 of the States within a region that have more
than 1⁄2 of their electric load served within the region. A
regional advisory body shall be composed of 1 member
from each participating State in the region, appointed by
the Governor of each State, and may include representa-
tives of agencies, States, and provinces outside the United
States. A regional advisory body may provide advice to the
Electric Reliability Organization, a regional entity, or the
Commission regarding the governance of an existing or
proposed regional entity within the same region, whether
a standard proposed to apply within the region is just,
reasonable, not unduly discriminatory or preferential, and
in the public interest, whether fees proposed to be assessed
665
within the region are just, reasonable, not unduly discrimi-
natory 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.
‘‘(k) ALASKA AND HAWAII.—The provisions of this
section do not apply to Alaska or Hawaii.’’.
(b) STATUS OF ERO.—The Electric Reliability Orga-
nization certified by the Federal Energy Regulatory Com-
mission under section 215(c) of the Federal Power Act
and any regional entity delegated enforcement authority
pursuant to section 215(e)(4) of that Act are not depart-
ments, agencies, or instrumentalities of the United States
Government.
Subtitle B—Transmission
Infrastructure Modernization
SEC. 1221. SITING OF INTERSTATE ELECTRIC TRANS-
MISSION FACILITIES.
(a) AMENDMENT OF FEDERAL POWER ACT.—Part
II of the Federal Power Act is amended by adding at the
end the following:
666
‘‘SEC. 216. SITING OF INTERSTATE ELECTRIC TRANS-
MISSION FACILITIES.
‘‘(a) DESIGNATION OF NATIONAL INTEREST ELEC-
TRIC TRANSMISSION CORRIDORS.—
‘‘(1) TRANSMISSION
CONGESTION
STUDY.—
Within 1 year after the enactment of this section,
and every 3 years thereafter, the Secretary of En-
ergy, in consultation with affected States, shall con-
duct a study of electric transmission congestion.
After considering alternatives and recommendations
from interested parties, including an opportunity for
comment from affected States, the Secretary shall
issue a report, based on such study, which may des-
ignate any geographic area experiencing electric en-
ergy transmission capacity constraints or congestion
that adversely affects consumers as a national inter-
est electric transmission corridor. The Secretary
shall conduct the study and issue the report in con-
sultation with any appropriate regional entity ref-
erenced in section 215 of this Act.
‘‘(2) CONSIDERATIONS.—In determining wheth-
er to designate a national interest electric trans-
mission corridor referred to in paragraph (1) under
this section, the Secretary may consider whether—
‘‘(A) the economic vitality and development
of the corridor, or the end markets served by
667
the corridor, may be constrained by lack of ade-
quate or reasonably priced electricity;
‘‘(B)(i) economic growth in the corridor, or
the end markets served by the corridor, may be
jeopardized by reliance on limited sources of en-
ergy; and
‘‘(ii) a diversification of supply is war-
ranted;
‘‘(C) the energy independence of the
United States would be served by the designa-
tion;
‘‘(D) the designation would be in the inter-
est of national energy policy; and
‘‘(E) the designation would enhance na-
tional defense and homeland security.
‘‘(b) CONSTRUCTION PERMIT.—Except as provided
in subsection (i), the Commission is authorized, after no-
tice and an opportunity for hearing, to issue a permit or
permits for the construction or modification of electric
transmission facilities in a national interest electric trans-
mission corridor designated by the Secretary under sub-
section (a) if the Commission finds that—
‘‘(1)(A) a State in which the transmission fa-
cilities are to be constructed or modified is without
authority to—
668
‘‘(i) approve the siting of the facilities; or
‘‘(ii) consider the interstate benefits ex-
pected to be achieved by the proposed construc-
tion or modification of transmission facilities in
the State;
‘‘(B) the applicant for a permit is a transmit-
ting utility under this Act but does not qualify to
apply for a permit or siting approval for the pro-
posed project in a State because the applicant does
not serve end-use customers in the State; or
‘‘(C) a State commission or other entity that
has authority to approve the siting of the facilities
has—
‘‘(i) withheld approval for more than 1
year after the filing of an application pursuant
to applicable law seeking approval or 1 year
after the designation of the relevant national in-
terest electric transmission corridor, whichever
is later; or
‘‘(ii) conditioned its approval in such a
manner that the proposed construction or modi-
fication will not significantly reduce trans-
mission congestion in interstate commerce or is
not economically feasible;
669
‘‘(2) the facilities to be authorized by the per-
mit will be used for the transmission of electric en-
ergy in interstate commerce;
‘‘(3) the proposed construction or modification
is consistent with the public interest;
‘‘(4) the proposed construction or modification
will significantly reduce transmission congestion in
interstate commerce and protects or benefits con-
sumers; and
‘‘(5) the proposed construction or modification
is consistent with sound national energy policy and
will enhance energy independence.
‘‘(c) PERMIT APPLICATIONS.—Permit applications
under subsection (b) shall be made in writing to the Com-
mission. The Commission shall issue rules setting forth
the form of the application, the information to be con-
tained in the application, and the manner of service of no-
tice of the permit application upon interested persons.
‘‘(d) COMMENTS.—In any proceeding before the
Commission under subsection (b), the Commission shall
afford each State in which a transmission facility covered
by the permit is or will be located, each affected Federal
agency and Indian tribe, private property owners, and
other interested persons, a reasonable opportunity to
670
present their views and recommendations with respect to
the need for and impact of a facility covered by the permit.
‘‘(e) RIGHTS-OF-WAY.—In the case of a permit under
subsection (b) for electric transmission facilities to be lo-
cated on property other than property owned by the
United States or a State, if the permit holder cannot ac-
quire by contract, or is unable to agree with the owner
of the property to the compensation to be paid for, the
necessary right-of-way to construct or modify such trans-
mission facilities, the permit holder may acquire the right-
of-way by the exercise of the right of eminent domain in
the district court of the United States for the district in
which the property concerned is located, or in the appro-
priate court of the State in which the property is located.
The practice and procedure in any action or proceeding
for that purpose in the district court of the United States
shall conform as nearly as may be with the practice and
procedure in similar action or proceeding in the courts of
the State where the property is situated.
‘‘(f) STATE LAW.—Nothing in this section shall pre-
clude any person from constructing or modifying any
transmission facility pursuant to State law.
‘‘(g) COMPENSATION.—Any exercise of eminent do-
main authority pursuant to this section shall be considered
a taking of private property for which just compensation
671
is due. Just compensation shall be an amount equal to
the full fair market value of the property taken on the
date of the exercise of eminent domain authority, except
that the compensation shall exceed fair market value if
necessary to make the landowner whole for decreases in
the value of any portion of the land not subject to eminent
domain. Any parcel of land acquired by eminent domain
under this subsection shall be transferred back to the
owner from whom it was acquired (or his heirs or assigns)
if the land is not used for the construction or modification
of electric transmission facilities within a reasonable pe-
riod of time after the acquisition. Other than construction,
modification, operation, or maintenance of electric trans-
mission facilities and related facilities, property acquired
under subsection (e) may not be used for any purpose (in-
cluding use for any heritage area, recreational trail, or
park) without the consent of the owner of the parcel from
whom the property was acquired (or the owner’s heirs or
assigns).
‘‘(h) COORDINATION OF FEDERAL AUTHORIZATIONS
FOR TRANSMISSION AND DISTRIBUTION FACILITIES.—
‘‘(1) LEAD AGENCY.—If an applicant, or pro-
spective applicant, for a Federal authorization re-
lated to an electric transmission or distribution facil-
ity so requests, the Department of Energy (DOE)
672
shall act as the lead agency for purposes of coordi-
nating all applicable Federal authorizations and re-
lated environmental reviews of the facility. For pur-
poses of this subsection, the term ‘Federal author-
ization’ means any authorization required under
Federal law in order to site a transmission or dis-
tribution facility, including but not limited to such
permits, special use authorizations, certifications,
opinions, or other approvals as may be required,
whether issued by a Federal or a State agency. To
the maximum extent practicable under applicable
Federal law, the Secretary of Energy shall coordi-
nate this Federal authorization and review process
with any Indian tribes, multi-State entities, and
State agencies that are responsible for conducting
any separate permitting and environmental reviews
of the facility, to ensure timely and efficient review
and permit decisions.
‘‘(2) AUTHORITY TO SET DEADLINES.—As lead
agency, the Department of Energy, in consultation
with agencies responsible for Federal authorizations
and, as appropriate, with Indian tribes, multi-State
entities, and State agencies that are willing to co-
ordinate their own separate permitting and environ-
mental reviews with the Federal authorization and
673
environmental reviews, shall establish prompt and
binding intermediate milestones and ultimate dead-
lines for the review of, and Federal authorization de-
cisions relating to, the proposed facility. The Sec-
retary of Energy shall ensure that once an applica-
tion has been submitted with such data as the Sec-
retary considers necessary, all permit decisions and
related environmental reviews under all applicable
Federal laws shall be completed within 1 year or, if
a requirement of another provision of Federal law
makes this impossible, as soon thereafter as is prac-
ticable. The Secretary of Energy also shall provide
an expeditious pre-application mechanism for pro-
spective applicants to confer with the agencies in-
volved to have each such agency determine and com-
municate to the prospective applicant within 60 days
of when the prospective applicant submits a request
for such information concerning—
‘‘(A) the likelihood of approval for a poten-
tial facility; and
‘‘(B) key issues of concern to the agencies
and public.
‘‘(3) CONSOLIDATED ENVIRONMENTAL REVIEW
AND RECORD OF DECISION.—As lead agency head,
the Secretary of Energy, in consultation with the af-
674
fected agencies, shall prepare a single environmental
review document, which shall be used as the basis
for all decisions on the proposed project under Fed-
eral law. The document may be an environmental as-
sessment or environmental impact statement under
the National Environmental Policy Act of 1969 if
warranted, or such other form of analysis as may be
warranted. The Secretary of Energy and the heads
of other agencies shall streamline the review and
permitting of transmission and distribution facilities
within corridors designated under section 503 of the
Federal Land Policy and Management Act (43
U.S.C. 1763) by fully taking into account prior anal-
yses and decisions relating to the corridors. Such
document shall include consideration by the relevant
agencies of any applicable criteria or other matters
as required under applicable laws.
‘‘(4) APPEALS.—In the event that any agency
has denied a Federal authorization required for a
transmission or distribution facility, or has failed to
act by the deadline established by the Secretary pur-
suant to this section for deciding whether to issue
the authorization, the applicant or any State in
which the facility would be located may file an ap-
peal with the Secretary, who shall, in consultation
675
with the affected agency, review the denial or take
action on the pending application. Based on the
overall record and in consultation with the affected
agency, the Secretary may then either issue the nec-
essary authorization with any appropriate condi-
tions, or deny the application. The Secretary shall
issue a decision within 90 days of the filing of the
appeal. In making a decision under this paragraph,
the Secretary shall comply with applicable require-
ments of Federal law, including any requirements of
the Endangered Species Act, the Clean Water Act,
the National Forest Management Act, the National
Environmental Policy Act of 1969, and the Federal
Land Policy and Management Act.
‘‘(5) CONFORMING REGULATIONS AND MEMO-
RANDA
OF
UNDERSTANDING.—Not later than 18
months after the date of enactment of this section,
the Secretary of Energy shall issue any regulations
necessary to implement this subsection. Not later
than 1 year after the date of enactment of this sec-
tion, the Secretary and the heads of all Federal
agencies with authority to issue Federal authoriza-
tions shall enter into Memoranda of Understanding
to ensure the timely and coordinated review and per-
mitting of electricity transmission and distribution
676
facilities. The head of each Federal agency with au-
thority to issue a Federal authorization shall des-
ignate a senior official responsible for, and dedicate
sufficient other staff and resources to ensure, full
implementation of the DOE regulations and any
Memoranda. Interested Indian tribes, multi-State
entities, and State agencies may enter such Memo-
randa of Understanding.
‘‘(6) DURATION AND RENEWAL.—Each Federal
land use authorization for an electricity transmission
or distribution facility shall be issued—
‘‘(A) for a duration, as determined by the
Secretary of Energy, commensurate with the
anticipated use of the facility, and
‘‘(B) with appropriate authority to manage
the right-of-way for reliability and environ-
mental protection.
Upon the expiration of any such authorization (in-
cluding an authorization issued prior to enactment
of this section), the authorization shall be reviewed
for renewal taking fully into account reliance on
such electricity infrastructure, recognizing its impor-
tance for public health, safety and economic welfare
and as a legitimate use of Federal lands.
677
‘‘(7) MAINTAINING
AND
ENHANCING
THE
TRANSMISSION INFRASTRUCTURE.—In exercising the
responsibilities under this section, the Secretary of
Energy shall consult regularly with the Federal En-
ergy Regulatory Commission (FERC), FERC-ap-
proved electric reliability organizations (including re-
lated regional entities), and FERC-approved Re-
gional Transmission Organizations and Independent
System Operators.
‘‘(i) INTERSTATE COMPACTS.—The consent of Con-
gress is hereby given for 3 or more contiguous States to
enter into an interstate compact, subject to approval by
Congress, establishing regional transmission siting agen-
cies to facilitate siting of future electric energy trans-
mission facilities within such States and to carry out the
electric energy transmission siting responsibilities of such
States. The Secretary of Energy may provide technical as-
sistance to regional transmission siting agencies estab-
lished under this subsection. Such regional transmission
siting agencies shall have the authority to review, certify,
and permit siting of transmission facilities, including fa-
cilities in national interest electric transmission corridors
(other than facilities on property owned by the United
States). The Commission shall have no authority to issue
a permit for the construction or modification of electric
678
transmission facilities within a State that is a party to
a compact, unless the members of a compact are in dis-
agreement and the Secretary makes, after notice and an
opportunity for a hearing, the finding described in section
(b)(1)(C).
‘‘(j) SAVINGS CLAUSE.—Nothing in this section shall
be construed to affect any requirement of the environ-
mental laws of the United States, including, but not lim-
ited to, the National Environmental Policy Act of 1969.
Subsection (h)(4) of this section shall not apply to any
Congressionally-designated components of the National
Wilderness Preservation System, the National Wild and
Scenic Rivers System, or the National Park system (in-
cluding National Monuments therein).
‘‘(k) ERCOT.—This section shall not apply within
the area referred to in section 212(k)(2)(A).’’.
(b) REPORTS
TO CONGRESS
ON CORRIDORS
AND
RIGHTS OF WAY ON FEDERAL LANDS.—The Secretary of
the Interior, the Secretary of Energy, the Secretary of Ag-
riculture, and the Chairman of the Council on Environ-
mental Quality shall, within 90 days of the date of enact-
ment of this subsection, submit a joint report to Congress
identifying each of the following:
(1) All existing designated transmission and
distribution corridors on Federal land and the status
679
of work related to proposed transmission and dis-
tribution corridor designations under Title V of the
Federal Land Policy and Management Act (43
U.S.C. 1761 et. Seq.), the schedule for completing
such work, any impediments to completing the work,
and steps that Congress could take to expedite the
process.
(2) The number of pending applications to lo-
cate transmission and distribution facilities on Fed-
eral lands, key information relating to each such fa-
cility, how long each application has been pending,
the schedule for issuing a timely decision as to each
facility, and progress in incorporating existing and
new such rights-of-way into relevant land use and
resource management plans or their equivalent.
(3) The number of existing transmission and
distribution rights-of-way on Federal lands that will
come up for renewal within the following 5, 10, and
15 year periods, and a description of how the Secre-
taries plan to manage such renewals.
SEC. 1222. THIRD-PARTY FINANCE.
(a) EXISTING FACILITIES.—The Secretary of Energy
(hereinafter in this section referred to as the ‘‘Secretary’’),
acting through the Administrator of the Western Area
Power Administration (hereinafter in this section referred
680
to as ‘‘WAPA’’), or through the Administrator of the
Southwestern Power Administration (hereinafter in this
section referred to as ‘‘SWPA’’), or both, may design, de-
velop, construct, operate, maintain, or own, or participate
with other entities in designing, developing, constructing,
operating, maintaining, or owning, an electric power
transmission facility and related facilities (‘‘Project’’)
needed to upgrade existing transmission facilities owned
by SWPA or WAPA if the Secretary of Energy, in con-
sultation with the applicable Administrator, determines
that the proposed Project—
(1)(A) is located in a national interest electric
transmission corridor designated under section
216(a) of the Federal Power Act and will reduce
congestion of electric transmission in interstate com-
merce; or
(B) is necessary to accommodate an actual or
projected increase in demand for electric trans-
mission capacity;
(2) is consistent with—
(A) transmission needs identified, in a
transmission expansion plan or otherwise, by
the appropriate Regional Transmission Organi-
zation or Independent System Operator (as de-
681
fined in the Federal Power Act), if any, or ap-
proved regional reliability organization; and
(B) efficient and reliable operation of the
transmission grid; and
(3) would be operated in conformance with pru-
dent utility practice.
(b) 
NEW
FACILITIES.—The 
Secretary, 
acting
through WAPA or SWPA, or both, may design, develop,
construct, operate, maintain, or own, or participate with
other entities in designing, developing, constructing, oper-
ating, maintaining, or owning, a new electric power trans-
mission facility and related facilities (‘‘Project’’) located
within any State in which WAPA or SWPA operates if
the Secretary, in consultation with the applicable Adminis-
trator, determines that the proposed Project—
(1)(A) is located in an area designated under
section 216(a) of the Federal Power Act and will re-
duce congestion of electric transmission in interstate
commerce; or
(B) is necessary to accommodate an actual or
projected increase in demand for electric trans-
mission capacity;
(2) is consistent with—
(A) transmission needs identified, in a
transmission expansion plan or otherwise, by
682
the appropriate Regional Transmission Organi-
zation or Independent System Operator, if any,
or approved regional reliability organization;
and
(B) efficient and reliable operation of the
transmission grid;
(3) will be operated in conformance with pru-
dent utility practice;
(4) will be operated by, or in conformance with
the rules of, the appropriate (A) Regional Trans-
mission Organization or Independent System Oper-
ator, if any, or (B) if such an organization does not
exist, regional reliability organization; and
(5) will not duplicate the functions of existing
transmission facilities or proposed facilities which
are the subject of ongoing or approved siting and re-
lated permitting proceedings.
(c) OTHER FUNDS.—
(1) IN GENERAL.—In carrying out a Project
under subsection (a) or (b), the Secretary may ac-
cept and use funds contributed by another entity for
the purpose of carrying out the Project.
(2) AVAILABILITY.—The contributed funds
shall be available for expenditure for the purpose of
carrying out the Project—
683
(A) without fiscal year limitation; and
(B) as if the funds had been appropriated
specifically for that Project.
(3) ALLOCATION OF COSTS.—In carrying out a
Project under subsection (a) or (b), any costs of the
Project not paid for by contributions from another
entity shall be collected through rates charged to
customers using the new transmission capability pro-
vided by the Project and allocated equitably among
these project beneficiaries using the new trans-
mission capability.
(d) RELATIONSHIP TO OTHER LAWS.—Nothing in
this section affects any requirement of—
(1) any Federal environmental law, including
the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.);
(2) any Federal or State law relating to the
siting of energy facilities; or
(3) any existing authorizing statutes.
(e) SAVINGS CLAUSE.—Nothing in this section shall
constrain or restrict an Administrator in the utilization
of other authority delegated to the Administrator of
WAPA or SWPA.
(f) SECRETARIAL
DETERMINATIONS.—Any deter-
mination made pursuant to subsections (a) or (b) shall
684
be based on findings by the Secretary using the best avail-
able data.
(g) MAXIMUM FUNDING AMOUNT.—The Secretary
shall not accept and use more than $100,000,000 under
subsection (c)(1) for the period encompassing fiscal years
2004 through 2013.
SEC. 1223. TRANSMISSION SYSTEM MONITORING.
Within 6 months after the date of enactment of this
Act, the Secretary of Energy and the Federal Energy Reg-
ulatory Commission shall study and report to Congress on
the steps which must be taken to establish a system to
make available to all transmission system owners and Re-
gional Transmission Organizations (as defined in the Fed-
eral Power Act) within the Eastern and Western Inter-
connections real-time information on the functional status
of all transmission lines within such Interconnections. In
such study, the Commission shall assess technical means
for implementing such transmission information system
and identify the steps the Commission or Congress must
take to require the implementation of such system.
SEC. 1224. ADVANCED TRANSMISSION TECHNOLOGIES.
(a) AUTHORITY.—The Federal Energy Regulatory
Commission, in the exercise of its authorities under the
Federal Power Act and the Public Utility Regulatory Poli-
685
cies Act of 1978, shall encourage the deployment of ad-
vanced transmission technologies.
(b) DEFINITION.—For the purposes of this section,
the term ‘‘advanced transmission technologies’’ means
technologies that increase the capacity, efficiency, or reli-
ability of existing or new transmission facilities, including,
but not limited to—
(1) high-temperature lines (including super-
conducting cables);
(2) underground cables;
(3) advanced conductor technology (including
advanced composite conductors, high-temperature
low-sag conductors, and fiber optic temperature
sensing conductors);
(4) high-capacity ceramic electric wire, connec-
tors, and insulators;
(5) optimized transmission line configurations
(including multiple phased transmission lines);
(6) modular equipment;
(7) wireless power transmission;
(8) ultra-high voltage lines;
(9) high-voltage DC technology;
(10) flexible AC transmission systems;
686
(11) energy storage devices (including pumped
hydro, compressed air, superconducting magnetic en-
ergy storage, flywheels, and batteries);
(12) controllable load;
(13) distributed generation (including PV, fuel
cells, microturbines);
(14) enhanced power device monitoring;
(15) direct system state sensors;
(16) fiber optic technologies;
(17) power electronics and related software (in-
cluding real time monitoring and analytical soft-
ware); and
(18) any other technologies the Commission
considers appropriate.
(c) 
OBSOLETE
OR
IMPRACTICABLE
TECH-
NOLOGIES.—The Commission is authorized to cease en-
couraging the deployment of any technology described in
this section on a finding that such technology has been
rendered obsolete or otherwise impracticable to deploy.
SEC. 1225. ELECTRIC TRANSMISSION AND DISTRIBUTION
PROGRAMS.
(a) ELECTRIC TRANSMISSION
AND DISTRIBUTION
PROGRAM.—The Secretary of Energy (hereinafter in this
section referred to as the ‘‘Secretary’’) acting through the
Director of the Office of Electric Transmission and Dis-
687
tribution shall establish a comprehensive research, devel-
opment, demonstration and commercial application pro-
gram to promote improved reliability and efficiency of
electrical transmission and distribution systems. This pro-
gram shall include—
(1) advanced energy delivery and storage tech-
nologies, materials, and systems, including new
transmission technologies, such as flexible alter-
nating current transmission systems, composite con-
ductor materials and other technologies that enhance
reliability, operational flexibility, or power-carrying
capability;
(2) advanced grid reliability and efficiency tech-
nology development;
(3) technologies contributing to significant load
reductions;
(4) advanced metering, load management, and
control technologies;
(5) technologies to enhance existing grid compo-
nents;
(6) the development and use of high-tempera-
ture superconductors to—
(A) enhance the reliability, operational
flexibility, or power-carrying capability of elec-
tric transmission or distribution systems; or
688
(B) increase the efficiency of electric en-
ergy generation, transmission, distribution, or
storage systems;
(7) integration of power systems, including sys-
tems to deliver high-quality electric power, electric
power reliability, and combined heat and power;
(8) supply of electricity to the power grid by
small scale, distributed and residential-based power
generators;
(9) the development and use of advanced grid
design, operation and planning tools;
(10) any other infrastructure technologies, as
appropriate; and
(11) technology transfer and education.
(b) PROGRAM PLAN.—Not later than 1 year after the
date of the enactment of this legislation, the Secretary,
in consultation with other appropriate Federal agencies,
shall prepare and transmit to Congress a 5-year program
plan to guide activities under this section. In preparing
the program plan, the Secretary may consult with utilities,
energy services providers, manufacturers, institutions of
higher education, other appropriate State and local agen-
cies, environmental organizations, professional and tech-
nical societies, and any other persons the Secretary con-
siders appropriate.
689
(c) IMPLEMENTATION.—The Secretary shall consider
implementing this program using a consortium of indus-
try, university and national laboratory participants.
(d) REPORT.—Not later than 2 years after the trans-
mittal of the plan under subsection (b), the Secretary shall
transmit a report to Congress describing the progress
made under this section and identifying any additional re-
sources needed to continue the development and commer-
cial application of transmission and distribution infra-
structure technologies.
(e) POWER DELIVERY RESEARCH INITIATIVE.—
(1) IN GENERAL.—The Secretary shall establish
a research, development, demonstration, and com-
mercial application initiative specifically focused on
power delivery utilizing components incorporating
high temperature superconductivity.
(2) GOALS.—The goals of this initiative shall be
to—
(A) establish facilities to develop high tem-
perature superconductivity power applications
in partnership with manufacturers and utilities;
(B) provide technical leadership for estab-
lishing reliability for high temperature super-
conductivity power applications including suit-
able modeling and analysis;
690
(C) facilitate commercial transition toward
direct current power transmission, storage, and
use for high power systems utilizing high tem-
perature superconductivity; and
(D) facilitate the integration of very low
impedance high temperature superconducting
wires and cables in existing electric networks to
improve system performance, power flow control
and reliability.
(3) 
REQUIREMENTS.—The 
initiative 
shall
include—
(A) feasibility analysis, planning, research,
and design to construct demonstrations of
superconducting links in high power, direct cur-
rent and controllable alternating current trans-
mission systems;
(B) public-private partnerships to dem-
onstrate deployment of high temperature super-
conducting cable into testbeds simulating a re-
alistic transmission grid and under varying
transmission conditions, including actual grid
insertions; and
(C) testbeds developed in cooperation with
national laboratories, industries, and univer-
sities to demonstrate these technologies, pre-
691
pare the technologies for commercial introduc-
tion, and address cost or performance road-
blocks to successful commercial use.
(4) AUTHORIZATION OF APPROPRIATIONS.—For
purposes of carrying out this subsection, there are
authorized to be appropriated—
(A) for fiscal year 2004, $15,000,000;
(B) for fiscal year 2005, $20,000,000;
(C) for fiscal year 2006, $30,000,000;
(D) for fiscal year 2007, $35,000,000; and
(E) for fiscal year 2008, $40,000,000.
SEC. 1226. ADVANCED POWER SYSTEM TECHNOLOGY IN-
CENTIVE PROGRAM.
(a) PROGRAM.—The Secretary of Energy is author-
ized to establish an Advanced Power System Technology
Incentive Program to support the deployment of certain
advanced power system technologies and to improve and
protect certain critical governmental, industrial, and com-
mercial processes. Funds provided under this section shall
be used by the Secretary to make incentive payments to
eligible owners or operators of advanced power system
technologies to increase power generation through en-
hanced operational, economic, and environmental perform-
ance. Payments under this section may only be made upon
692
receipt by the Secretary of an incentive payment applica-
tion establishing an applicant as either—
(1) a qualifying advanced power system tech-
nology facility; or
(2) a qualifying security and assured power fa-
cility.
(b) INCENTIVES.—Subject to availability of funds, a
payment of 1.8 cents per kilowatt-hour shall be paid to
the owner or operator of a qualifying advanced power sys-
tem technology facility under this section for electricity
generated at such facility. An additional 0.7 cents per kilo-
watt-hour shall be paid to the owner or operator of a quali-
fying security and assured power facility for electricity
generated at such facility. Any facility qualifying under
this section shall be eligible for an incentive payment for
up to, but not more than, the first 10,000,000 kilowatt-
hours produced in any fiscal year.
(c) ELIGIBILITY.—For purposes of this section:
(1) QUALIFYING
ADVANCED
POWER
SYSTEM
TECHNOLOGY FACILITY.—The term ‘‘qualifying ad-
vanced power system technology facility’’ means a
facility using an advanced fuel cell, turbine, or hy-
brid power system or power storage system to gen-
erate or store electric energy.
693
(2) QUALIFYING
SECURITY
AND
ASSURED
POWER
FACILITY.—The term ‘‘qualifying security
and assured power facility’’ means a qualifying ad-
vanced power system technology facility determined
by the Secretary of Energy, in consultation with the
Secretary of Homeland Security, to be in critical
need of secure, reliable, rapidly available, high-qual-
ity power for critical governmental, industrial, or
commercial applications.
(d) AUTHORIZATION.—There are authorized to be ap-
propriated to the Secretary of Energy for the purposes
of this section, $10,000,000 for each of the fiscal years
2004 through 2010.
SEC. 1227. OFFICE OF ELECTRIC TRANSMISSION AND DIS-
TRIBUTION.
(a) CREATION OF AN OFFICE OF ELECTRIC TRANS-
MISSION AND DISTRIBUTION.—Title II of the Department
of Energy Organization Act (42 U.S.C. 7131 et seq.) (as
amended by section 502(a) of this Act) is amended by in-
serting the following after section 217, as added by title
V of this Act:
‘‘SEC. 218. OFFICE OF ELECTRIC TRANSMISSION AND DIS-
TRIBUTION.
‘‘(a) ESTABLISHMENT.—There is established within
the Department an Office of Electric Transmission and
694
Distribution. This Office shall be headed by a Director,
subject to the authority of the Secretary. The Director
shall be appointed by the Secretary. The Director shall
be compensated at the annual rate prescribed for level IV
of the Executive Schedule under section 5315 of title 5,
United States Code.
‘‘(b) DIRECTOR.—The Director shall—
‘‘(1) coordinate and develop a comprehensive,
multi-year strategy to improve the Nation’s elec-
tricity transmission and distribution;
‘‘(2) implement or, where appropriate, coordi-
nate the implementation of, the recommendations
made in the Secretary’s May 2002 National Trans-
mission Grid Study;
‘‘(3) oversee research, development, and dem-
onstration to support Federal energy policy related
to electricity transmission and distribution;
‘‘(4) grant authorizations for electricity import
and export pursuant to section 202(c), (d), (e), and
(f) of the Federal Power Act (16 U.S.C. 824a);
‘‘(5) perform other functions, assigned by the
Secretary, related to electricity transmission and dis-
tribution; and
‘‘(6) develop programs for workforce training in
power and transmission engineering.’’.
695
(b) CONFORMING AMENDMENTS.—(1) The table of
contents of the Department of Energy Organization Act
(42 U.S.C. 7101 note) is amended by inserting after the
item relating to section 217 the following new item:
‘‘Sec. 218. Office of Electric Transmission and Distribution.’’.
(2) Section 5315 of title 5, United States Code, is
amended by inserting after the item relating to ‘‘Inspector
General, Department of Energy.’’ the following:
‘‘Director, Office of Electric Transmission and
Distribution, Department of Energy.’’.
Subtitle C—Transmission
Operation Improvements
SEC. 1231. OPEN NONDISCRIMINATORY ACCESS.
Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by inserting after section 211 the fol-
lowing new section:
‘‘SEC. 211A. OPEN ACCESS BY UNREGULATED TRANSMIT-
TING UTILITIES.
‘‘(a) TRANSMISSION SERVICES.—Subject to section
212(h), the Commission may, by rule or order, require an
unregulated transmitting utility to provide transmission
services—
‘‘(1) at rates that are comparable to those that
the unregulated transmitting utility charges itself;
and
696
‘‘(2) on terms and conditions (not relating to
rates) that are comparable to those under which
such unregulated transmitting utility provides trans-
mission services to itself and that are not unduly
discriminatory or preferential.
‘‘(b) EXEMPTION.—The Commission shall exempt
from any rule or order under this section any unregulated
transmitting utility that—
‘‘(1) sells no more than 4,000,000 megawatt
hours of electricity per year; or
‘‘(2) does not own or operate any transmission
facilities that are necessary for operating an inter-
connected transmission system (or any portion
thereof); or
‘‘(3) meets other criteria the Commission deter-
mines to be in the public interest.
‘‘(c) LOCAL DISTRIBUTION FACILITIES.—The re-
quirements of subsection (a) shall not apply to facilities
used in local distribution.
‘‘(d) EXEMPTION
TERMINATION.—Whenever the
Commission, after an evidentiary hearing held upon a
complaint and after giving consideration to reliability
standards established under section 215, finds on the
basis of a preponderance of the evidence that any exemp-
tion granted pursuant to subsection (b) unreasonably im-
697
pairs the continued reliability of an interconnected trans-
mission system, it shall revoke the exemption granted to
that transmitting utility.
‘‘(e) APPLICATION
TO UNREGULATED TRANSMIT-
TING UTILITIES.—The rate changing procedures applica-
ble to public utilities under subsections (c) and (d) of sec-
tion 205 are applicable to unregulated transmitting utili-
ties for purposes of this section.
‘‘(f) REMAND.—In exercising its authority under
paragraph (1) of subsection (a), the Commission may re-
mand transmission rates to an unregulated transmitting
utility for review and revision where necessary to meet the
requirements of subsection (a).
‘‘(g) OTHER REQUESTS.—The provision of trans-
mission services under subsection (a) does not preclude a
request for transmission services under section 211.
‘‘(h) LIMITATION.—The Commission may not require
a State or municipality to take action under this section
that would violate a private activity bond rule for purposes
of section 141 of the Internal Revenue Code of 1986 (26
U.S.C. 141).
‘‘(i) TRANSFER OF CONTROL OF TRANSMITTING FA-
CILITIES.—Nothing in this section authorizes the Commis-
sion to require an unregulated transmitting utility to
transfer control or operational control of its transmitting
698
facilities to an RTO or any other Commission-approved
independent transmission organization designated to pro-
vide nondiscriminatory transmission access.
‘‘(j) DEFINITION.—For purposes of this section, the
term ‘unregulated transmitting utility’ means an entity
that—
‘‘(1) owns or operates facilities used for the
transmission of electric energy in interstate com-
merce; and
‘‘(2) is an entity described in section 201(f).’’.
SEC. 1232. SENSE OF CONGRESS ON REGIONAL TRANS-
MISSION ORGANIZATIONS.
It is the sense of Congress that, in order to promote
fair, open access to electric transmission service, benefit
retail consumers, facilitate wholesale competition, improve
efficiencies in transmission grid management, promote
grid reliability, remove opportunities for unduly discrimi-
natory or preferential transmission practices, and provide
for the efficient development of transmission infrastruc-
ture needed to meet the growing demands of competitive
wholesale power markets, all transmitting utilities in inter-
state commerce should voluntarily become members of Re-
gional Transmission Organizations as defined in section
3 of the Federal Power Act.
699
SEC. 1233. REGIONAL TRANSMISSION ORGANIZATION AP-
PLICATIONS PROGRESS REPORT.
Not later than 120 days after the date of enactment
of this section, the Federal Energy Regulatory Commis-
sion shall submit to Congress a report containing each of
the following:
(1) A list of all regional transmission organiza-
tion applications filed at the Commission pursuant
to subpart F of part 35 of title 18, Code of Federal
Regulations (in this section referred to as ‘‘Order
No. 2000’’), including an identification of each pub-
lic utility and other entity included within the pro-
posed membership of the regional transmission orga-
nization.
(2) A brief description of the status of each
pending regional transmission organization applica-
tion, including a precise explanation of how each
fails to comply with the minimal requirements of
Order No. 2000 and what steps need to be taken to
bring each application into such compliance.
(3) For any application that has not been fi-
nally approved by the Commission, a detailed de-
scription of every aspect of the application that the
Commission has determined does not conform to the
requirements of Order No. 2000.
700
(4) For any application that has not been fi-
nally approved by the Commission, an explanation
by the Commission of why the items described pur-
suant to paragraph (3) constitute material non-
compliance with the requirements of the Commis-
sion’s Order No. 2000 sufficient to justify denial of
approval by the Commission.
(5) For all regional transmission organization
applications filed pursuant to the Commission’s
Order No. 2000, whether finally approved or not—
(A) a discussion of that regional trans-
mission organization’s efforts to minimize rate
seams between itself and—
(i) other regional transmission organi-
zations; and
(ii) entities not participating in a re-
gional transmission organization;
(B) a discussion of the impact of such
seams on consumers and wholesale competition;
and
(C) a discussion of minimizing cost-shifting
on consumers.
SEC. 1234. FEDERAL UTILITY PARTICIPATION IN REGIONAL
TRANSMISSION ORGANIZATIONS.
(a) DEFINITIONS.—For purposes of this section—
701
(1) APPROPRIATE FEDERAL REGULATORY AU-
THORITY.—The term ‘‘appropriate Federal regu-
latory authority’’ means—
(A) with respect to a Federal power mar-
keting agency (as defined in the Federal Power
Act), the Secretary of Energy, except that the
Secretary may designate the Administrator of a
Federal power marketing agency to act as the
appropriate Federal regulatory authority with
respect to the transmission system of that Fed-
eral power marketing agency; and
(B) with respect to the Tennessee Valley
Authority, the Board of Directors of the Ten-
nessee Valley Authority.
(2) FEDERAL
UTILITY.—The term ‘‘Federal
utility’’ means a Federal power marketing agency or
the Tennessee Valley Authority.
(3) TRANSMISSION SYSTEM.—The term ‘‘trans-
mission system’’ means electric transmission facili-
ties owned, leased, or contracted for by the United
States and operated by a Federal utility.
(b) TRANSFER.—The appropriate Federal regulatory
authority is authorized to enter into a contract, agreement
or other arrangement transferring control and use of all
or part of the Federal utility’s transmission system to an
702
RTO or ISO (as defined in the Federal Power Act), ap-
proved by the Federal Energy Regulatory Commission.
Such contract, agreement or arrangement shall include—
(1) performance standards for operation and
use of the transmission system that the head of the
Federal utility determines necessary or appropriate,
including standards that assure recovery of all the
Federal utility’s costs and expenses related to the
transmission facilities that are the subject of the
contract, agreement or other arrangement; consist-
ency with existing contracts and third-party financ-
ing arrangements; and consistency with said Federal
utility’s statutory authorities, obligations, and limi-
tations;
(2) provisions for monitoring and oversight by
the Federal utility of the RTO’s or ISO’s fulfillment
of the terms and conditions of the contract, agree-
ment or other arrangement, including a provision for
the resolution of disputes through arbitration or
other means with the regional transmission organi-
zation or with other participants, notwithstanding
the obligations and limitations of any other law re-
garding arbitration; and
(3) a provision that allows the Federal utility to
withdraw from the RTO or ISO and terminate the
703
contract, agreement or other arrangement in accord-
ance with its terms.
Neither this section, actions taken pursuant to it, nor any
other transaction of a Federal utility using an RTO or
ISO shall confer upon the Federal Energy Regulatory
Commission jurisdiction or authority over the Federal util-
ity’s electric generation assets, electric capacity or energy
that the Federal utility is authorized by law to market,
or the Federal utility’s power sales activities.
(c) EXISTING STATUTORY
AND OTHER OBLIGA-
TIONS.—
(1) SYSTEM OPERATION REQUIREMENTS.—No
statutory provision requiring or authorizing a Fed-
eral utility to transmit electric power or to construct,
operate or maintain its transmission system shall be
construed to prohibit a transfer of control and use
of its transmission system pursuant to, and subject
to all requirements of subsection (b).
(2) OTHER
OBLIGATIONS.—This subsection
shall not be construed to—
(A) suspend, or exempt any Federal utility
from, any provision of existing Federal law, in-
cluding but not limited to any requirement or
direction relating to the use of the Federal util-
ity’s transmission system, environmental protec-
704
tion, fish and wildlife protection, flood control,
navigation, water delivery, or recreation; or
(B) authorize abrogation of any contract
or treaty obligation.
(3) REPEAL.—Section 311 of title III of Appen-
dix B of the Act of October 27, 2000 (P.L. 106–
377, section 1(a)(2); 114 Stat. 1441, 1441A–80; 16
U.S.C. 824n) is repealed.
SEC. 1235. STANDARD MARKET DESIGN.
(a) REMAND.—The Commission’s proposed rule-
making entitled ‘‘Remedying Undue Discrimination
through Open Access Transmission Service and Standard
Electricity Market Design’’ (Docket No. RM01–12–000)
(‘‘SMD NOPR’’) is remanded to the Commission for re-
consideration. No final rule mandating a standard elec-
tricity market design pursuant to the proposed rule-
making, including any rule or order of general applica-
bility within the scope of the proposed rulemaking, may
be issued before October 31, 2006, or take effect before
December 31, 2006. Any final rule issued by the Commis-
sion pursuant to the proposed rulemaking shall be pre-
ceded by a second notice of proposed rulemaking issued
after the date of enactment of this Act and an opportunity
for public comment.
705
(b) SAVINGS CLAUSE.—This section shall not be con-
strued to modify or diminish any authority or obligation
the Commission has under this Act, the Federal Power
Act, or other applicable law, including, but not limited to,
any authority to—
(1) issue any rule or order (of general or par-
ticular applicability) pursuant to any such authority
or obligation; or
(2) act on a filing or filings by 1 or more trans-
mitting utilities for the voluntary formation of a Re-
gional Transmission Organization or Independent
System Operator (as defined in the Federal Power
Act) (and related market structures or rules) or vol-
untary modification of an existing Regional Trans-
mission Organization or Independent System Oper-
ator (and related market structures or rules).
SEC. 1236. NATIVE LOAD SERVICE OBLIGATION.
Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:
‘‘SEC. 217. NATIVE LOAD SERVICE OBLIGATION.
‘‘(a) MEETING SERVICE OBLIGATIONS.—(1) Any
load-serving entity that, as of the date of enactment of
this section—
‘‘(A) owns generation facilities, markets the
output of Federal generation facilities, or holds
706
rights under 1 or more wholesale contracts to pur-
chase electric energy, for the purpose of meeting a
service obligation, and
‘‘(B) by reason of ownership of transmission fa-
cilities, or 1 or more contracts or service agreements
for firm transmission service, holds firm trans-
mission rights for delivery of the output of such gen-
eration facilities or such purchased energy to meet
such service obligation,
is entitled to use such firm transmission rights, or, equiva-
lent tradable or financial transmission rights, in order to
deliver such output or purchased energy, or the output of
other generating facilities or purchased energy to the ex-
tent deliverable using such rights, to the extent required
to meet its service obligation.
‘‘(2) To the extent that all or a portion of the service
obligation covered by such firm transmission rights or
equivalent tradable or financial transmission rights is
transferred to another load-serving entity, the successor
load-serving entity shall be entitled to use the firm trans-
mission rights or equivalent tradable or financial trans-
mission rights associated with the transferred service obli-
gation. Subsequent transfers to another load-serving enti-
ty, or back to the original load-serving entity, shall be enti-
tled to the same rights.
707
‘‘(3) The Commission shall exercise its authority
under this Act in a manner that facilitates the planning
and expansion of transmission facilities to meet the rea-
sonable needs of load-serving entities to satisfy their serv-
ice obligations.
‘‘(b) ALLOCATION
OF
TRANSMISSION
RIGHTS.—
Nothing in this section shall affect any methodology ap-
proved by the Commission prior to September 15, 2003,
for the allocation of transmission rights by an RTO or
ISO that has been authorized by the Commission to allo-
cate transmission rights.
‘‘(c) CERTAIN TRANSMISSION RIGHTS.—The Com-
mission may exercise authority under this Act to make
transmission rights not used to meet an obligation covered
by subsection (a) available to other entities in a manner
determined by the Commission to be just, reasonable, and
not unduly discriminatory or preferential.
‘‘(d) OBLIGATION TO BUILD.—Nothing in this Act
shall relieve a load-serving entity from any obligation
under State or local law to build transmission or distribu-
tion facilities adequate to meet its service obligations.
‘‘(e) CONTRACTS.—Nothing in this section shall pro-
vide a basis for abrogating any contract or service agree-
ment for firm transmission service or rights in effect as
of the date of the enactment of this subsection.
708
‘‘(f) WATER PUMPING FACILITIES.—The Commis-
sion shall ensure that any entity described in section
201(f) that owns transmission facilities used predomi-
nately to support its own water pumping facilities shall
have, with respect to such facilities, protections for trans-
mission service comparable to those provided to load-serv-
ing entities pursuant to this section.
‘‘(g) ERCOT.—This section shall not apply within
the area referred to in section 212(k)(2)(A).
‘‘(h) JURISDICTION.—This section does not authorize
the Commission to take any action not otherwise within
its jurisdiction.
‘‘(i) EFFECT OF EXERCISING RIGHTS.—An entity
that lawfully exercises rights granted under subsection (a)
shall not be considered by such action as engaging in
undue discrimination or preference under this Act.
‘‘(j) TVA AREA.—For purposes of subsection
(a)(1)(B), a load-serving entity that is located within the
service area of the Tennessee Valley Authority and that
has a firm wholesale power supply contract with the Ten-
nessee Valley Authority shall be deemed to hold firm
transmission rights for the transmission of such power.
‘‘(k) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘distribution utility’ means an
electric utility that has a service obligation to end-
709
users or to a State utility or electric cooperative
that, directly or indirectly, through 1 or more addi-
tional State utilities or electric cooperatives, provides
electric service to end-users.
‘‘(2) The term ‘load-serving entity’ means a dis-
tribution utility or an electric utility that has a serv-
ice obligation.
‘‘(3) The term ‘service obligation’ means a re-
quirement applicable to, or the exercise of authority
granted to, an electric utility under Federal, State
or local law or under long-term contracts to provide
electric service to end-users or to a distribution util-
ity.
‘‘(4) The term ‘State utility’ means a State or
any political subdivision of a State, or any agency,
authority, or instrumentality of any 1 or more of the
foregoing, or a corporation which is wholly owned,
directly or indirectly, by any 1 or more of the fore-
going, competent to carry on the business of devel-
oping, transmitting, utilizing or distributing power.’’.
SEC. 1237. STUDY ON THE BENEFITS OF ECONOMIC DIS-
PATCH.
(a) STUDY.—The Secretary of Energy, in coordina-
tion and consultation with the States, shall conduct a
study on—
710
(1) the procedures currently used by electric
utilities to perform economic dispatch;
(2) identifying possible revisions to those proce-
dures to improve the ability of nonutility generation
resources to offer their output for sale for the pur-
pose of inclusion in economic dispatch; and
(3) the potential benefits to residential, com-
mercial, and industrial electricity consumers nation-
ally and in each state if economic dispatch proce-
dures were revised to improve the ability of non-
utility generation resources to offer their output for
inclusion in economic dispatch.
(b) DEFINITION.—The term ‘‘economic dispatch’’
when used in this section means the operation of genera-
tion facilities to produce energy at the lowest cost to reli-
ably serve consumers, recognizing any operational limits
of generation and transmission facilities.
(c) REPORT TO CONGRESS AND THE STATES.—Not
later than 90 days after the date of enactment of this Act,
and on a yearly basis following, the Secretary of Energy
shall submit a report to Congress and the States on the
results of the study conducted under subsection (a), in-
cluding recommendations to Congress and the States for
any suggested legislative or regulatory changes.
711
Subtitle D—Transmission Rate
Reform
SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT.
Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:
‘‘SEC. 218. TRANSMISSION INFRASTRUCTURE INVESTMENT.
‘‘(a) RULEMAKING REQUIREMENT.—Within 1 year
after the enactment of this section, the Commission shall
establish, by rule, incentive-based (including, but not lim-
ited to performance-based) rate treatments for the trans-
mission of electric energy in interstate commerce by public
utilities for the purpose of benefiting consumers by ensur-
ing reliability and reducing the cost of delivered power by
reducing transmission congestion. Such rule shall—
‘‘(1) promote reliable and economically efficient
transmission and generation of electricity by pro-
moting capital investment in the enlargement, im-
provement, maintenance and operation of facilities
for the transmission of electric energy in interstate
commerce;
‘‘(2) provide a return on equity that attracts
new investment in transmission facilities (including
related transmission technologies);
‘‘(3) encourage deployment of transmission
technologies and other measures to increase the ca-
712
pacity and efficiency of existing transmission facili-
ties and improve the operation of such facilities; and
‘‘(4) allow recovery of all prudently incurred
costs necessary to comply with mandatory reliability
standards issued pursuant to section 215 of this
Act.
The Commission may, from time to time, revise such rule.
‘‘(b) ADDITIONAL INCENTIVES FOR RTO PARTICIPA-
TION.—In the rule issued under this section, the Commis-
sion shall, to the extent within its jurisdiction, provide for
incentives to each transmitting utility or electric utility
that joins a Regional Transmission Organization or Inde-
pendent System Operator. Incentives provided by the
Commission pursuant to such rule shall include—
‘‘(1) recovery of all prudently incurred costs to
develop and participate in any proposed or approved
RTO, ISO, or independent transmission company;
‘‘(2) recovery of all costs previously approved by
a State commission which exercised jurisdiction over
the transmission facilities prior to the utility’s par-
ticipation in the RTO or ISO, including costs nec-
essary to honor preexisting transmission service con-
tracts, in a manner which does not reduce the reve-
nues the utility receives for transmission services for
713
a reasonable transition period after the utility joins
the RTO or ISO;
‘‘(3) recovery as an expense in rates of the
costs prudently incurred to conduct transmission
planning and reliability activities, including the costs
of participating in RTO, ISO and other regional
planning activities and design, study and other
precertification costs involved in seeking permits and
approvals for proposed transmission facilities;
‘‘(4) a current return in rates for construction
work in progress for transmission facilities and full
recovery of prudently incurred costs for constructing
transmission facilities;
‘‘(5) formula transmission rates; and
‘‘(6) a maximum 15 year accelerated deprecia-
tion on new transmission facilities for rate treatment
purposes.
The Commission shall ensure that any costs recoverable
pursuant to this subsection may be recovered by such util-
ity through the transmission rates charged by such utility
or through the transmission rates charged by the RTO
or ISO that provides transmission service to such utility.
‘‘(c) JUST AND REASONABLE RATES.—All rates ap-
proved under the rules adopted pursuant to this section,
including any revisions to such rules, are subject to the
714
requirement of sections 205 and 206 that all rates,
charges, terms, and conditions be just and reasonable and
not unduly discriminatory or preferential.’’.
SEC. 1242. VOLUNTARY TRANSMISSION PRICING PLANS.
Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:
‘‘SEC. 219. VOLUNTARY TRANSMISSION PRICING PLANS.
‘‘(a) IN GENERAL.—Any transmission provider, in-
cluding an RTO or ISO, may submit to the Commission
a plan or plans under section 205 containing the criteria
for determining the person or persons that will be required
to pay for any construction of new transmission facilities
or expansion, modification or upgrade of transmission fa-
cilities (in this section referred to as ‘transmission service
related expansion’) or new generator interconnection.
‘‘(b) VOLUNTARY TRANSMISSION PRICING PLANS.—
(1) Any plan or plans submitted under subsection (a) shall
specify the method or methods by which costs may be allo-
cated or assigned. Such methods may include, but are not
limited to:
‘‘(A) directly assigned;
‘‘(B) participant funded; or
‘‘(C) rolled into regional or sub-regional rates.
715
‘‘(2) FERC shall approve a plan or plans submitted
under subparagraph (B) of paragraph (1) if such plan or
plans—
‘‘(A) result in rates that are just and reason-
able and not unduly discriminatory or preferential
consistent with section 205; and
‘‘(B) ensure that the costs of any transmission
service related expansion or new generator inter-
connection not required to meet applicable reliability
standards established under section 215 are assigned
in a fair manner, meaning that those who benefit
from the transmission service related expansion or
new generator interconnection pay an appropriate
share of the associated costs, provided that—
‘‘(i) costs may not be assigned or allocated
to an electric utility if the native load customers
of that utility would not have required such
transmission service related expansion or new
generator interconnection absent the request for
transmission service related expansion or new
generator interconnection that necessitated the
investment;
‘‘(ii) the party requesting such trans-
mission service related expansion or new gener-
716
ator interconnection shall not be required to
pay for both—
‘‘(I) the assigned cost of the upgrade;
and
‘‘(II) the difference between—
‘‘(aa) the embedded cost paid for
transmission services (including the
cost of the requested upgrade); and
‘‘(bb) the embedded cost that
would have been paid absent the up-
grade; and
‘‘(iii) the party or parties who pay for fa-
cilities necessary for the transmission service
related expansion or new generator interconnec-
tion receives full compensation for its costs for
the participant funded facilities in the form
of—
‘‘(I) monetary credit equal to the cost
of the participant funded facilities (ac-
counting for the time value of money at
the Gross Domestic Product deflator),
which credit shall be pro-rated in equal in-
stallments over a period of not more than
30 years and shall not exceed in total the
amount of the initial investment, against
717
the transmission charges that the funding
entity or its assignee is otherwise assessed
by the transmission provider;
‘‘(II) appropriate financial or physical
rights; or
‘‘(III) any other method of cost recov-
ery or compensation approved by the Com-
mission.
‘‘(3) A plan submitted under this section shall apply
only to—
‘‘(A) a contract or interconnection agreement
executed or filed with the Commission after the date
of enactment of this section; or
‘‘(B) an interconnection agreement pending re-
hearing as of November 1, 2003.
‘‘(4) Nothing in this section diminishes or alters the
rights of individual members of an RTO or ISO under
this Act.
‘‘(5) Nothing in this section shall affect the allocation
of costs or the cost methodology employed by an RTO or
ISO authorized by the Commission to allocate costs (in-
cluding costs for transmission service related expansion or
new generator interconnection) prior to the date of enact-
ment of this section.
718
‘‘(6) This section shall not apply within the area re-
ferred to in section 212(k)(2)(A).
‘‘(7) The term ‘transmission provider’ means a public
utility that owns or operates facilities that provide inter-
connection or transmission service in interstate com-
merce.’’.
Subtitle E—Amendments to PURPA
SEC. 1251. NET METERING AND ADDITIONAL 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 fol-
lowing:
‘‘(11) NET
METERING.—Each electric utility
shall make available upon request net metering serv-
ice to any electric consumer that the electric utility
serves. For purposes of this paragraph, the term
‘net metering service’ means service to an electric
consumer under which electric energy generated by
that electric consumer from an eligible on-site gener-
ating facility and delivered to the local distribution
facilities may be used to offset electric energy pro-
vided by the electric utility to the electric consumer
during the applicable billing period.
‘‘(12) FUEL
SOURCES.—Each electric utility
shall develop a plan to minimize dependence on 1
719
fuel source and to ensure that the electric energy it
sells to consumers is generated using a diverse range
of fuels and technologies, including renewable tech-
nologies.
‘‘(13) 
FOSSIL
FUEL
GENERATION
EFFI-
CIENCY.—Each electric utility shall develop and im-
plement a 10-year plan to increase the efficiency of
its fossil fuel generation.’’.
(b) COMPLIANCE.—
(1) TIME LIMITATIONS.—Section 112(b) of the
Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 2622(b)) is amended by adding at the end
the following:
‘‘(3)(A) Not later than 2 years after the enactment
of this paragraph, each State regulatory authority (with
respect to each electric utility for which it has ratemaking
authority) and each nonregulated electric utility shall com-
mence the consideration referred to in section 111, or set
a hearing date for such consideration, with respect to each
standard established by paragraphs (11) through (13) of
section 111(d).
‘‘(B) Not later than 3 years after the date of the en-
actment of this paragraph, each State regulatory authority
(with respect to each electric utility for which it has rate-
making authority), and each nonregulated electric utility,