436 
pensated 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 electricity 
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.’’. 
(b) CONFORMING AMENDMENTS.—(1) The table of con-
tents of the Department of Energy Organization Act (42
437 
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 following 
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 
‘‘(2) on terms and conditions (not relating to 
rates) that are comparable to those under which such 
unregulated transmitting utility provides trans-
438 
mission services to itself and that are not unduly dis-
criminatory or preferential. 
‘‘(b) EXEMPTION.—The Commission shall exempt from 
any rule or order under this section any unregulated trans-
mitting 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 there-
of); or 
‘‘(3) meets other criteria the Commission deter-
mines to be in the public interest. 
‘‘(c) LOCAL DISTRIBUTION FACILITIES.—The require-
ments of subsection (a) shall not apply to facilities used 
in local distribution. 
‘‘(d) EXEMPTION TERMINATION.—Whenever the Com-
mission, after an evidentiary hearing held upon a com-
plaint and after giving consideration to reliability stand-
ards established under section 215, finds on the basis of a 
preponderance of the evidence that any exemption granted 
pursuant to subsection (b) unreasonably impairs the con-
tinued reliability of an interconnected transmission system, 
it shall revoke the exemption granted to that transmitting 
utility.
439 
‘‘(e) APPLICATION TO UNREGULATED TRANSMITTING 
UTILITIES.—The rate changing procedures applicable to 
public utilities under subsections (c) and (d) of section 205 
are applicable to unregulated transmitting utilities for pur-
poses of this section. 
‘‘(f) REMAND.—In exercising its authority under para-
graph (1) of subsection (a), the Commission may remand 
transmission rates to an unregulated transmitting utility 
for review and revision where necessary to meet the require-
ments 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 
facilities to an RTO or any other Commission-approved 
independent transmission organization designated to pro-
vide nondiscriminatory transmission access.
440 
‘‘(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 re-
tail consumers, facilitate wholesale competition, improve ef-
ficiencies in transmission grid management, promote grid 
reliability, remove opportunities for unduly discriminatory 
or preferential transmission practices, and provide for the 
efficient development of transmission infrastructure needed 
to meet the growing demands of competitive wholesale 
power markets, all transmitting utilities in interstate com-
merce should voluntarily become members of Regional 
Transmission Organizations as defined in section 3 of the 
Federal Power Act. 
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 Commission
441 
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 Reg-
ulations (in this section referred to as ‘‘Order No. 
2000’’), including an identification of each public 
utility and other entity included within the proposed 
membership of the regional transmission organiza-
tion. 
(2) A brief description of the status of each pend-
ing regional transmission organization application, 
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. 
(4) For any application that has not been fi-
nally approved by the Commission, an explanation 
by the Commission of why the items described pursu-
ant to paragraph (3) constitute material noncompli-