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directly or indirectly owned, controlled, or held 
with power to vote, by such holding company; 
and 
(B) any person, the management or poli-
cies of which the Commission, after notice and 
opportunity for hearing, determines to be sub-
ject to a controlling influence, directly or indi-
rectly, by such holding company (either alone or 
pursuant to an arrangement or understanding 
with one or more other persons) so as to make 
it necessary for the rate protection of utility 
customers with respect to rates that such per-
son be subject to the obligations, duties, and li-
abilities imposed by this subtitle upon sub-
sidiary companies of holding companies. 
(17) The term ‘‘voting security’’ means any se-
curity presently entitling the owner or holder thereof 
to vote in the direction or management of the affairs 
of a company. 
SEC. 16043. REPEAL OF THE PUBLIC UTILITY HOLDING 
COMPANY ACT OF 1935. 
The Public Utility Holding Company Act of 1935 (15 
U.S.C. 79 et seq.) is repealed.
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SEC. 16044. FEDERAL ACCESS TO BOOKS AND RECORDS. 
(a) IN GENERAL.—Each holding company and each 
associate company thereof shall maintain, and shall make 
available to the Commission, such books, accounts, memo-
randa, and other records as the Commission deems to be 
relevant to costs incurred by a public utility or natural 
gas company that is an associate company of such holding 
company and necessary or appropriate for the protection 
of utility customers with respect to jurisdictional rates. 
(b) AFFILIATE COMPANIES.—Each affiliate of a hold-
ing company or of any subsidiary company of a holding 
company shall maintain, and shall make available to the 
Commission, such books, accounts, memoranda, and other 
records with respect to any transaction with another affil-
iate, as the Commission deems to be relevant to costs in-
curred by a public utility or natural gas company that is 
an associate company of such holding company and nec-
essary or appropriate for the protection of utility cus-
tomers with respect to jurisdictional rates. 
(c) HOLDING COMPANY SYSTEMS.—The Commission 
may examine the books, accounts, memoranda, and other 
records of any company in a holding company system, or 
any affiliate thereof, as the Commission deems to be rel-
evant to costs incurred by a public utility or natural gas 
company within such holding company system and nec-
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essary or appropriate for the protection of utility cus-
tomers with respect to jurisdictional rates. 
(d) CONFIDENTIALITY.—No member, officer, or em-
ployee of the Commission shall divulge any fact or infor-
mation that may come to his or her knowledge during the 
course of examination of books, accounts, memoranda, or 
other records as provided in this section, except as may 
be directed by the Commission or by a court of competent 
jurisdiction. 
SEC. 16045. STATE ACCESS TO BOOKS AND RECORDS. 
(a) In GENERAL.—Upon the written request of a 
State commission having jurisdiction to regulate a public 
utility company in a holding company system, the holding 
company or any associate company or affiliate thereof, 
other than such public utility company, wherever located, 
shall produce for inspection books, accounts, memoranda, 
and other records that—
(1) have been identified in reasonable detail by 
the State commission; 
(2) the State commission deems are relevant to 
costs incurred by such public utility company; and 
(3) are necessary for the effective discharge of 
the responsibilities of the State commission with re-
spect to such proceeding.
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(b) LIMITATION.—Subsection (a) does not apply to 
any person that is a holding company solely by reason of 
ownership of one or more qualifying facilities under the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2601 et seq.). 
(c) CONFIDENTIALITY OF INFORMATION.—The pro-
duction of books, accounts, memoranda, and other records 
under subsection (a) shall be subject to such terms and 
conditions as may be necessary and appropriate to safe-
guard against unwarranted disclosure to the public of any 
trade secrets or sensitive commercial information. 
(d) EFFECT ON STATE LAW.—Nothing in this sec-
tion shall preempt applicable State law concerning the pro-
vision of books, accounts, memoranda, and other records, 
or in any way limit the rights of any State to obtain books, 
accounts, memoranda, and other records under any other 
Federal law, contract, or otherwise. 
(e) COURT JURISDICTION.—Any United States dis-
trict court located in the State in which the State commis-
sion referred to in subsection (a) is located shall have ju-
risdiction to enforce compliance with this section. 
SEC. 16046. EXEMPTION AUTHORITY. 
(a) RULEMAKING.—Not later than 90 days after the 
effective date of this subtitle, the Commission shall pro-
mulgate a final rule to exempt from the requirements of
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section 16044 (relating to Federal access to books and 
records) any person that is a holding company, solely with 
respect to one or more—
(1) qualifying facilities under the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2601 et 
seq.); 
(2) exempt wholesale generators; or 
(3) foreign utility companies. 
(b) OTHER AUTHORITY.—The Commission shall ex-
empt a person or transaction from the requirements of 
section 16044 (relating to Federal access to books and 
records) if, upon application or upon the motion of the 
Commission— 
(1) the Commission finds that the books, ac-
counts, memoranda, and other records of any person 
are not relevant to the jurisdictional rates of a pub-
lic utility or natural gas company; or 
(2) the Commission finds that any class of 
transactions is not relevant to the jurisdictional 
rates of a public utility or natural gas company. 
SEC. 16047. AFFILIATE TRANSACTIONS. 
(a) COMMISSION AUTHORITY UNAFFECTED.—Noth-
ing in this subtitle shall limit the authority of the Commis-
sion under the Federal Power Act (16 U.S.C. 791a et seq.) 
to require that jurisdictional rates are just and reasonable,
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including the ability to deny or approve the pass through 
of costs, the prevention of cross-subsidization, and the pro-
mulgation of such rules and regulations as are necessary 
or appropriate for the protection of utility consumers. 
(b) RECOVERY OF COSTS.—Nothing in this subtitle 
shall preclude the Commission or a State commission from 
exercising its jurisdiction under otherwise applicable law 
to determine whether a public utility company, public util-
ity, or natural gas company may recover in rates any costs 
of an activity performed by an associate company, or any 
costs of goods or services acquired by such public utility 
company from an associate company. 
SEC. 16048. APPLICABILITY. 
Except as otherwise specifically provided in this sub-
title, no provision of this subtitle shall apply to, or be 
deemed to include— 
(1) the United States; 
(2) a State or any political subdivision of a 
State; 
(3) any foreign governmental authority not op-
erating in the United States; 
(4) any agency, authority, or instrumentality of 
any entity referred to in paragraph (1), (2), or (3); 
or
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(5) any officer, agent, or employee of any entity 
referred to in paragraph (1), (2), or (3) acting as 
such in the course of his or her official duty. 
SEC. 16049. EFFECT ON OTHER REGULATIONS. 
Nothing in this subtitle precludes the Commission or 
a State commission from exercising its jurisdiction under 
otherwise applicable law to protect utility customers. 
SEC. 16050. ENFORCEMENT. 
The Commission shall have the same powers as set 
forth in sections 306 through 317 of the Federal Power 
Act (16 U.S.C. 825e–825p) to enforce the provisions of 
this subtitle. 
SEC. 16051. SAVINGS PROVISIONS. 
(a) IN GENERAL.—Nothing in this subtitle prohibits 
a person from engaging in or continuing to engage in ac-
tivities or transactions in which it is legally engaged or 
authorized to engage on the date of enactment of this Act, 
so long as that person continues to comply with the terms 
of any such authorization, whether by rule or by order. 
(b) EFFECT ON OTHER COMMISSION AUTHORITY.—
Nothing in this subtitle limits the authority of the Com-
mission under the Federal Power Act (16 U.S.C. 791a et 
seq.) (including section 301 of that Act) or the Natural 
Gas Act (15 U.S.C. 717 et seq.) (including section 8 of 
that Act).
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SEC. 16052. IMPLEMENTATION. 
Not later than 12 months after the date of enactment 
of this subtitle, the Commission shall— 
(1) promulgate such regulations as may be nec-
essary or appropriate to implement this subtitle 
(other than section 16045, relating to State access 
to books and records); and 
(2) submit to the Congress detailed rec-
ommendations on technical and conforming amend-
ments to Federal law necessary to carry out this 
subtitle and the amendments made by this subtitle. 
SEC. 16053. TRANSFER OF RESOURCES. 
All books and records that relate primarily to the 
functions transferred to the Commission under this sub-
title shall be transferred from the Securities and Exchange 
Commission to the Commission. 
SEC. 16054. EFFECTIVE DATE. 
This subtitle shall take effect 12 months after the 
date of enactment of this subtitle. 
SEC. 16055. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated such funds 
as may be necessary to carry out this subtitle. 
SEC. 16056. CONFORMING AMENDMENTS TO THE FEDERAL 
POWER ACT. 
(a) CONFLICT OF JURISDICTION.—Section 318 of the 
Federal Power Act (16 U.S.C. 825q) is repealed.
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(b) DEFINITIONS.—(1) Section 201(g)(5) of the Fed-
eral Power Act (16 U.S.C. 824(g)(5)) is amended by strik-
ing ‘‘1935’’ and inserting ‘‘2003’’. 
(2) Section 214 of the Federal Power Act (16 U.S.C. 
824m) is amended by striking ‘‘1935’’ and inserting 
‘‘2003’’. 
Subtitle E—PURPA Amendments 
SEC. 16061. REAL-TIME PRICING AND TIME-OF-USE METER-
ING 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) REAL-TIME PRICING.—(A) Each electric 
utility shall, at the request of an electric consumer, 
provide electric service under a real-time rate sched-
ule, under which the rate charged by the electric 
utility varies by the hour (or smaller time interval) 
according to changes in the electric utility’s whole-
sale power cost. The real-time pricing service shall 
enable the electric consumer to manage energy use 
and cost through real-time metering and commu-
nications technology. 
‘‘(B) For purposes of implementing this para-
graph, any reference contained in this section to the
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date of enactment of the Public Utility Regulatory 
Policies Act of 1978 shall be deemed to be a ref-
erence to the date of enactment of this paragraph. 
‘‘(C) Notwithstanding subsections (b) and (c) of 
section 112, each State regulatory authority shall 
consider and make a determination concerning 
whether it is appropriate to implement the standard 
set out in subparagraph (A) not later than 1 year 
after the date of enactment of this paragraph. 
‘‘(12) TIME-OF-USE METERING.—(A) Each elec-
tric utility shall, at the request of an electric con-
sumer, provide electric service under a time-of-use 
rate schedule which enables the electric consumer to 
manage energy use and cost through time-of-use me-
tering and technology. 
‘‘(B) For purposes of implementing this para-
graph, any reference contained in this section to the 
date of enactment of the Public Utility Regulatory 
Policies Act of 1978 shall be deemed to be a ref-
erence to the date of enactment of this paragraph. 
‘‘(C) Notwithstanding subsections (b) and (c) of 
section 112, each State regulatory authority shall 
consider and make a determination concerning 
whether it is appropriate to implement the standards
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set out in subparagraph (A) not later than 1 year 
after the date of enactment of this paragraph.’’. 
(b) SPECIAL RULES.—Section 115 of the Public Util-
ity Regulatory Policies Act of 1978 (16 U.S.C. 2625) is 
amended by adding at the end the following: 
‘‘(i) REAL-TIME PRICING.—In a State that permits 
third-party marketers to sell electric energy to retail elec-
tric consumers, the electric consumer shall be entitled to 
receive the same real-time metering and communication 
service as a direct retail electric consumer of the electric 
utility. 
‘‘(j) TIME-OF-USE METERING.—In a State that per-
mits third-party marketers to sell electric energy to retail 
electric consumers, the electric consumer shall be entitled 
to receive the same time-of-use metering and communica-
tion service as a direct retail electric consumer of the elec-
tric utility.’’. 
SEC. 16062. COGENERATION AND SMALL POWER PRODUC-
TION PURCHASE AND SALE REQUIREMENTS. 
(a) TERMINATION OF MANDATORY PURCHASE AND 
SALE REQUIREMENTS.—Section 210 of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 824a–3) is 
amended by adding at the end the following: 
‘‘(m) TERMINATION OF MANDATORY PURCHASE AND 
SALE REQUIREMENTS.—
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‘‘(1) OBLIGATION
TO
PURCHASE.—After the 
date of enactment of this subsection, no electric util-
ity shall be required to enter into a new contract or 
obligation to purchase electric energy from a quali-
fying cogeneration facility or a qualifying small 
power production facility under this section if the 
Commission finds that— 
‘‘(A) the qualifying cogeneration facility or 
qualifying small power production facility has 
access to—
‘‘(i) independently administered, auc-
tion-based day ahead and real time whole-
sale markets for the sale of electric energy, 
and 
‘‘(ii) long-term wholesale markets for 
the sale of capacity and electric energy; 
‘‘(B) the qualifying cogeneration facility or 
qualifying small power production facility has 
access to a competitive wholesale market for the 
sale of electric energy that provides such quali-
fying cogeneration facility or qualifying small 
power production facility with opportunities to 
sell electric energy that, at a minimum, are 
comparable to the opportunities provided by the
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markets, or some minimum combination there-
of, described in subparagraph (A); or 
‘‘(C) the qualifying cogeneration facility 
does not meet criteria established by the Com-
mission pursuant to the rulemaking set forth in 
subparagraph (n) and has not filed with the 
Commission a notice of self-certification or an 
application for Commission certification under 
18 C.F.R. 292.207 prior to the date of enact-
ment of this subsection. 
‘‘(2) COMMISSION
REVIEW.—(A) Any electric 
utility may file an application with the Commission 
for relief from the mandatory purchase obligation 
pursuant to this subsection on a utility-wide basis. 
Such application shall set forth the reasons why 
such relief is appropriate and describe how the con-
ditions set forth in subparagraphs (A) and (B) of 
paragraph (1) of this subsection have been met. 
‘‘(B) After notice, including sufficient notice to 
potentially affected qualifying facilities, and an op-
portunity for comment, and within 90 days of the 
filing of an application under subparagraph (A), the 
Commission shall make a final determination as to 
whether the conditions set forth in subparagraphs 
(A) and (B) of paragraph (1) have been met. The
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Commission shall not be authorized to issue a tolling 
order regarding such application or otherwise delay 
a final decision regarding such application. 
‘‘(3) REINSTATEMENT OF OBLIGATION TO PUR-
CHASE.—(A) At any time after the Commission 
makes a finding under paragraph (2) relieving an 
electric utility of its obligation to purchase electric 
energy, a qualifying cogeneration facility or a quali-
fying small power production facility may apply to 
the Commission for an order reinstating the electric 
utility’s obligation to purchase electric energy under 
this section. Such application shall set forth the rea-
sons why such relief is no longer appropriate and de-
scribe how the tests set forth in subparagraphs (A) 
and (B) of paragraph (1) of this subsection are no 
longer met. 
‘‘(B) After notice, including sufficient notice to 
potentially affected utilities, and opportunity for 
comment, and within 90 days of the filing of an ap-
plication under subparagraph (A), the Commission 
shall issue an order reinstating the electric utility’s 
obligation to purchase electric energy under this sec-
tion if the Commission finds that the condition in 
paragraph (1), which relieved the obligation to pur-
chase, is no longer met. The Commission shall not
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be authorized to issue a tolling order regarding such 
application or otherwise delay a final decision re-
garding such application. 
‘‘(4) OBLIGATION TO SELL.—After the date of 
enactment of this subsection, no electric utility shall 
be required to enter into a new contract or obliga-
tion to sell electric energy to a qualifying cogenera-
tion facility or a qualifying small power production 
facility if—
‘‘(A) competing retail electric suppliers are 
willing and able to provide electric energy to the 
qualifying cogeneration facility or qualifying 
small power production facility, and 
‘‘(B) the electric utility is not required by 
State law to sell electric energy in its service 
territory. 
‘‘(5) NO
EFFECT
ON
EXISTING
RIGHTS
AND 
REMEDIES.—Nothing in this subsection affects the 
rights or remedies of any party under any contract 
or obligation, in effect or pending approval before 
the appropriate State regulatory authority or non-
regulated electric utility on the date of enactment of 
this subsection, to purchase electric energy or capac-
ity from or to sell electric energy or capacity to a
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facility under this Act (including the right to recover 
costs of purchasing electric energy or capacity). 
‘‘(6) RECOVERY OF COSTS.—
‘‘(A) REGULATION.—To ensure recovery 
by an electric utility that purchases electric en-
ergy or capacity from a qualifying facility pur-
suant to any legally enforceable obligation en-
tered into or imposed under this section of all 
prudently incurred costs associated with the 
purchases, the Commission shall issue and en-
force such regulations as may be required to en-
sure that the electric utility shall recover the 
prudently incurred costs associated with such 
purchases. 
‘‘(B) ENFORCEMENT.—A regulation under 
subparagraph (A) shall be enforceable in ac-
cordance with the provisions of law applicable 
to enforcement of regulations under the Federal 
Power Act (16 U.S.C. 791a et seq.). 
‘‘(n) RULEMAKING FOR NEW FACILITIES.—
‘‘(1) IN GENERAL.—Not later than 180 days 
after the date of enactment of this subsection, the 
Commission shall issue a rule revising the criteria 
for qualifying cogeneration facilities in 18 C.F.R. 
292.205. In particular, the Commission shall evalu-
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ate the rules regarding qualifying facility criteria 
and revise such rules, as necessary, to ensure—
‘‘(A) that the thermal energy output of a 
new qualifying cogeneration facility is used in a 
productive and beneficial manner; 
‘‘(B) the electrical and thermal output of 
the cogeneration facility is used predominantly 
for commercial or industrial processes and not 
intended predominantly for sale to an electric 
utility; and 
‘‘(C) continuing progress in the develop-
ment of efficient electric energy generating 
technology. 
‘‘(2) APPLICABILITY.—Any revisions made to 
operating and efficiency standards shall be applica-
ble only to a cogeneration facility that—
‘‘(A) was not a qualifying cogeneration fa-
cility, or 
‘‘(B) had not filed with the Commission a 
notice of self-certification or an application for 
Commission certification under 18 C.F.R. 
292.207, 
prior to the date of enactment of this subsection. 
‘‘(3) DEFINITION.—For purposes of this sub-
section, the term ‘commercial processes’ includes
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uses of thermal and electric energy for educational 
and healthcare facilities. 
‘‘(o) RULES FOR EXISTING FACILITIES.— Notwith-
standing rule revisions under subsection (n), the Commis-
sion’s rules in effect prior to the effective date of any re-
vised rules prescribed under subsection (n) shall continue 
to apply to any cogeneration facility or small power pro-
duction facility that—
‘‘(1) was a qualifying cogeneration facility or a 
qualifying small power production facility, or 
‘‘(2) had filed with the Commission a notice of 
self-certification or an application for Commission 
certification under 18 C.F.R. 292.207, 
prior to the date of enactment of subsections (m) and 
(n).’’. 
(b) ELIMINATION OF OWNERSHIP LIMITATIONS.—
(1) Section 3(17)(C) of the Federal Power Act (16 U.S.C. 
796(17)(C)) is amended to read as follows: 
‘‘(C) ‘qualifying small power production fa-
cility’ means a small power production facility 
that the Commission determines, by rule, meets 
such requirements (including requirements re-
specting minimum size, fuel use, and fuel effi-
ciency) as the Commission may, by rule, pre-
scribe.’’.
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(2) Section 3(18)(B) of the Federal Power Act (16 
U.S.C. 796(18)(B)) is amended to read as follows: 
‘‘(B) 
‘qualifying 
cogeneration 
facility’ 
means a cogeneration facility that the Commis-
sion determines, by rule, meets such require-
ments (including requirements respecting min-
imum size, fuel use, and fuel efficiency) as the 
Commission may, by rule, prescribe.’’. 
SEC. 16063. SMART METERING. 
(a) IN GENERAL.—Section 111(d) of the Public Utili-
ties Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) 
is amended by adding at the end the following: 
‘‘(13) TIME-BASED
METERING
AND
COMMU-
NICATIONS.—(A) Not later than eighteen (18) 
months after the date of enactment of this para-
graph, each electric utility shall offer each of its cus-
tomer classes, and provide individual customers upon 
customer request, a time-based rate schedule under 
which the rate charged by the electric utility varies 
during different time periods and reflects the vari-
ance in the costs of generating and purchasing elec-
tricity at the wholesale level. The time-based rate 
schedule shall enable the electric consumer to man-
age energy use and cost through advanced metering 
and communications technology.
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‘‘(B) The types of time-based rate schedules 
that may be offered under the schedule referred to 
in subparagraph (A) include, among others, each the 
following: 
‘‘(i) Time-Of-Use pricing whereby elec-
tricity prices are set for a specific time period 
on an advance or forward basis, typically not 
changing more often than twice a year. Prices 
paid for energy consumed during these periods 
shall be pre-established and known to con-
sumers in advance of such consumption, allow-
ing them to vary their demand and usage in re-
sponse to such prices and manage their energy 
costs by shifting usage to a lower cost period or 
reducing their consumption overall. 
‘‘(ii) Critical Peak Pricing whereby time-
of-use prices are in effect except for certain 
peak days, when prices may reflect the costs of 
generating and purchasing electricity at the 
wholesale level and when consumers may receive 
additional discounts for reducing peak period 
energy consumption. 
‘‘(iii) Real-Time pricing whereby electricity 
prices are set for a specific time period on an
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advanced or forward basis and may change as 
often as hourly. 
‘‘(C) Each electric utility subject to subpara-
graph (A) shall provide each customer requesting a 
time-based rate with a time-based meter capable of 
enabling the utility and customer to offer and re-
ceive such rate, respectively. 
‘‘(D) For purposes of implementing this para-
graph, any reference contained in this section to the 
date of enactment of the Public Utility Regulatory 
Policies Act of 1978 shall be deemed to be a ref-
erence to the date of enactment of this paragraph. 
‘‘(E) In a State that permits third-party mar-
keters to sell electric energy to retail electric con-
sumers, such consumers shall be entitled to receive 
that same time-based metering and communications 
device and service as a retail electric consumer of 
the electric utility. 
‘‘(F) Notwithstanding subsections (b) and (c) of 
section 112, each State regulatory authority shall, 
not later than twelve (12) months after enactment 
of this paragraph conduct an investigation in accord-
ance with section 115(i) and issue a decision wheth-
er it is appropriate to implement the standards set 
out in subparagraphs (A) and (C).’’.
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(b) STATE INVESTIGATION OF DEMAND RESPONSE 
AND TIME-BASED METERING.—Section 115 of the Public 
Utilities Regulatory Policies Act of 1978 (16 U.S.C. 2625) 
is amended by adding the at the end the following: 
‘‘(k) TIME-BASED
METERING
AND
COMMUNICA-
TIONS.—Each State regulatory authority shall, not later 
than twelve (12) months after enactment of this sub-
section, conduct an investigation and issue a decision 
whether or not it is appropriate for electric utilities to pro-
vide and install time-based meters and communications 
devices for each of their customers which enable such cus-
tomers to participate in time-based pricing rate schedules 
and other demand response programs.’’. 
(c) 
FEDERAL
ASSISTANCE
ON
DEMAND
RE-
SPONSE.—Section 132(a) of the Public Utility Regulatory 
Polices Act of 1978 (16 U.S.C. 2642(a)) is amended by 
striking ‘‘and’’ at the end of paragraph (3), striking the 
period at the end of paragraph (4) and inserting ‘‘; and’’, 
and by adding the following at the end thereof: 
‘‘(5) technologies, techniques and rate-making 
methods related to advanced metering and commu-
nications and the use of these technologies, tech-
niques and methods in demand response programs.’’.
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(d) FEDERAL GUIDANCE.—Section 132 of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2643) 
is amended by adding the following at the end thereof: 
‘‘(d) DEMAND RESPONSE.—The Secretary shall be 
responsible for each of the following: 
‘‘(1) Educating consumers on the availability, 
advantages and benefits of advanced metering and 
communications technologies including the funding 
of demonstration or pilot projects. 
‘‘(2) Working with States, utilities, other energy 
providers and advanced metering and communica-
tions experts to identify and address barriers to the 
adoption of demand response programs. 
‘‘(3) Within 6 months of enactment, provide the 
Congress with a report that identifies and quantifies 
the national benefits of demand response and pro-
vides policy recommendations as to how to achieve 
specific levels of such benefits by January 1, 2005.’’. 
(e) DEMAND RESPONSE AND REGIONAL COORDINA-
TION.—
(1) POLICY.—It is the policy of the United 
States to encourage States to coordinate, on a re-
gional basis, State energy policies to provide reliable 
and affordable demand response services to the pub-
lic.
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(2) TECHNICAL ASSISTANCE.—The Secretary of 
Energy shall provide technical assistance to States 
and regional organizations formed by two or more 
States to assist them in—
(A) identifying the areas with the greatest 
demand response potential; 
(B) identifying and resolving problems in 
transmission and distribution networks, includ-
ing through the use of demand response; and 
(C) developing plans and programs to use 
demand response to respond to peak demand or 
emergency needs. 
(3) REPORT.—The Federal Energy Regulatory 
Commission shall prepare and publish an annual re-
port, by appropriate region, that assesses demand 
response resources, including those available from all 
consumer classes, and which identifies and reviews 
each of the following: 
(A) Saturation and penetration rate of ad-
vanced 
meters 
and 
communications 
tech-
nologies, devices and systems. 
(B) Existing demand response programs 
and time-based rate programs.
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(C) The annual resource contribution of 
demand resources, including the prior year and 
following years. 
(D) The potential for demand response as 
a quantifiable, reliable resource for regional 
planning purposes. 
(E) Steps taken to ensure that, in regional 
transmission planning and operations, that de-
mand resources are provided equitable treat-
ment as a quantifiable, reliable resource relative 
to the resource obligations of any load-serving 
entity, transmission provider or transmitting 
party. 
(f) COST RECOVERY OF DEMAND RESPONSE DE-
VICES.—It is the policy of the United States that time-
based pricing and other forms of demand response, where-
by electricity customers are provided with electricity price 
signals and the ability to benefit by responding to them, 
shall be encouraged and the deployment of such tech-
nology and devices that enable electricity customers to 
participate in such pricing and demand response systems 
shall be facilitated. It is further the policy of the United 
States that the benefits of such demand response that ac-
crue to those not deploying such technology and devices,
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but who are part of the same regional electricity entity, 
shall be recognized. 
Subtitle F—Renewable Energy 
SEC. 16071. NET METERING. 
(a) ADOPTION OF STANDARD.—Section 111(d) of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2621(d)) is amended by adding at the end the following: 
‘‘(14) NET METERING.—(A) Each electric util-
ity shall make available upon request net metering 
service to any electric consumer that the electric 
utility serves. 
‘‘(B) For purposes of implementing this para-
graph, any reference contained in this section to the 
date of enactment of the Public Utility Regulatory 
Policies Act of 1978 shall be deemed to be a ref-
erence to the date of enactment of this paragraph. 
‘‘(C) Notwithstanding subsections (b) and (c) of 
section 112, each State regulatory authority shall 
consider and make a determination concerning 
whether it is appropriate to implement the standard 
set out in subparagraph (A) not later than 1 year 
after the date of enactment of this paragraph.’’. 
(b) SPECIAL RULES FOR NET METERING.—Section 
115 of the Public Utility Regulatory Policies Act of 1978
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(16 U.S.C. 2625) is amended by adding at the end the 
following: 
‘‘(l) NET METERING.—In undertaking the consider-
ation and making the determination under section 111 
with respect to the standard concerning net metering es-
tablished by section 111(d)(14), the term ‘net metering 
service’ shall mean a service provided in accordance with 
the following standards: 
‘‘(1) RATES AND CHARGES.—An electric util-
ity—
‘‘(A) shall charge the owner or operator of 
an on-site generating facility rates and charges 
that are identical to those that would be 
charged other electric consumers of the electric 
utility in the same rate class; and 
‘‘(B) shall not charge the owner or oper-
ator of an on-site generating facility any addi-
tional standby, capacity, interconnection, or 
other rate or charge. 
‘‘(2) MEASUREMENT.—An electric utility that 
sells electric energy to the owner or operator of an 
on-site generating facility shall measure the quantity 
of electric energy produced by the on-site facility 
and the quantity of electric energy consumed by the 
owner or operator of an on-site generating facility
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during a billing period in accordance with normal 
metering practices. 
‘‘(3) ELECTRIC ENERGY SUPPLIED EXCEEDING 
ELECTRIC ENERGY GENERATED.—If the quantity of 
electric energy sold by the electric utility to an on-
site generating facility exceeds the quantity of elec-
tric energy supplied by the on-site generating facility 
to the electric utility during the billing period, the 
electric utility may bill the owner or operator for the 
net quantity of electric energy sold, in accordance 
with normal metering practices. 
‘‘(4) ELECTRIC ENERGY GENERATED EXCEED-
ING ELECTRIC ENERGY SUPPLIED.—If the quantity 
of electric energy supplied by the on-site generating 
facility to the electric utility exceeds the quantity of 
electric energy sold by the electric utility to the on-
site generating facility during the billing period—
‘‘(A) the electric utility may bill the owner 
or operator of the on-site generating facility for 
the appropriate charges for the billing period in 
accordance with paragraph (2); and 
‘‘(B) the owner or operator of the on-site 
generating facility shall be credited for the ex-
cess kilowatt-hours generated during the billing
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period, with the kilowatt-hour credit appearing 
on the bill for the following billing period. 
‘‘(5) SAFETY
AND
PERFORMANCE
STAND-
ARDS.—An eligible on-site generating facility and 
net metering system used by an electric consumer 
shall meet all applicable safety, performance, reli-
ability, and interconnection standards established by 
the National Electrical Code, the Institute of Elec-
trical and Electronics Engineers, and Underwriters 
Laboratories. 
‘‘(6) ADDITIONAL CONTROL AND TESTING RE-
QUIREMENTS.—The Commission, after consultation 
with State regulatory authorities and nonregulated 
electric utilities and after notice and opportunity for 
comment, may adopt, by rule, additional control and 
testing requirements for on-site generating facilities 
and net metering systems that the Commission de-
termines are necessary to protect public safety and 
system reliability. 
‘‘(7) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) The term ‘eligible on-site generating 
facility’ means—
‘‘(i) a facility on the site of a residen-
tial electric consumer with a maximum
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generating capacity of 10 kilowatts or less 
that is fueled by solar energy, wind energy, 
or fuel cells; or 
‘‘(ii) a facility on the site of a com-
mercial electric consumer with a maximum 
generating capacity of 500 kilowatts or 
less that is fueled solely by a renewable en-
ergy resource, landfill gas, or a high effi-
ciency system. 
‘‘(B) The term ‘renewable energy resource’ 
means solar, wind, biomass, or geothermal en-
ergy. 
‘‘(C) The term ‘high efficiency system’ 
means service fuel cells or combined heat and 
power. 
‘‘(D) The term ‘net metering’ means serv-
ice to an electric consumer under which electric 
energy generated by that electric consumer 
from an eligible on-site generating facility and 
delivered to the local distribution facilities may 
be used to offset electric energy provided by the 
electric utility to the electric consumer during 
the applicable billing period.’’.
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SEC. 16072. RENEWABLE ENERGY PRODUCTION INCENTIVE. 
(a) INCENTIVE PAYMENTS.—Section 1212(a) of the 
Energy Policy Act of 1992 (42 U.S.C. 13317(a)) is 
amended by striking ‘‘and which satisfies’’ and all that 
follows through ‘‘Secretary shall establish.’’ and inserting 
‘‘. If there are insufficient appropriations to make full pay-
ments for electric production from all qualified renewable 
energy facilities in any given year, the Secretary shall as-
sign 60 percent of appropriated funds for that year to fa-
cilities that use solar, wind, geothermal, or closed-loop 
(dedicated energy crops) biomass technologies to generate 
electricity, and assign the remaining 40 percent to other 
projects. The Secretary may, after transmitting to the 
Congress an explanation of the reasons therefor, alter the 
percentage requirements of the preceding sentence.’’. 
(b) QUALIFIED RENEWABLE ENERGY FACILITY.—
Section 1212(b) of the Energy Policy Act of 1992 (42 
U.S.C. 13317(b)) is amended—
(1) by striking ‘‘a State or any political’’ and 
all that follows through ‘‘nonprofit electrical cooper-
ative’’ and inserting ‘‘a not-for-profit electric cooper-
ative, a public utility described in section 115 of the 
Internal Revenue Code of 1986, a State, Common-
wealth, territory, or possession of the United States 
or the District of Columbia, or a political subdivision
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thereof, or an Indian tribal government of subdivi-
sion thereof,’’; and 
(2) by inserting ‘‘landfill gas,’’ after ‘‘wind, bio-
mass,’’. 
(c) ELIGIBILITY WINDOW.—Section 1212(c) of the 
Energy Policy Act of 1992 (42 U.S.C. 13317(c)) is 
amended by striking ‘‘during the 10-fiscal year period be-
ginning with the first full fiscal year occurring after the 
enactment of this section’’ and inserting ‘‘after October 
1, 2003, and before October 1, 2013’’. 
(d) AMOUNT OF PAYMENT.—Section 1212(e)(1) of 
the Energy Policy Act of 1992 (42 U.S.C. 13317(e)(1)) 
is amended by inserting ‘‘landfill gas,’’ after ‘‘wind, bio-
mass,’’. 
(e) SUNSET.—Section 1212(f) of the Energy Policy 
Act of 1992 (42 U.S.C. 13317(f)) is amended by striking 
‘‘the expiration of’’ and all that follows through ‘‘of this 
section’’ and inserting ‘‘September 30, 2023’’. 
(f) AUTHORIZATION OF APPROPRIATIONS.—Section 
1212(g) of the Energy Policy Act of 1992 (42 U.S.C. 
13317(g)) is amended to read as follows: 
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
there are authorized to be appropriated such sums