section, the Federal Energy Regulatory Commission shall, 
following public notice and comment, develop and publish 
model provisions for adoption by State utility regulatory 
commissions regarding each of the following: 
‘‘(1) REVENUE
STABILITY
AND
INCENTIVES 
FOR
DISTRIBUTORS.—Policies for rate-setting and 
return on investment for State-regulated electricity 
and natural gas distributors that participate in suc-
cessful, cost-effective energy efficiency programs. 
Such model language shall include provisions for de-
coupling the earnings of such regulated entities from 
full dependence on the volume of electricity or nat-
ural gas distributed by them to customer facilities. 
Such model language shall also include provisions 
for policies for cost recovery and other financial in-
centives, such that electric and gas utility investors 
are rewarded similarly for similar levels of invest-
ment in customer energy efficiency and in conven-
tional utility assets and that regulated utilities are 
encouraged to include end-use efficiency measures 
and utility-owned, customer-owned, or third party- 
owned CHP systems in electric capacity and trans-
mission and distribution plans. 
‘‘(2) NONDISCRIMINATORY IDENTIFICATION OF 
COST-EFFECTIVE SAVINGS OPPORTUNITIES.—Estab-
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lishing a public, nondiscriminatory bidding process 
open to customers and demand side management 
service providers to identify cost-effective electricity 
or natural gas savings opportunities within a retail 
electricity or natural gas distributor’s service area. 
The model bidding plan shall provide for a dis-
tributor to procure all or a portion of its proposed 
savings measures, including measures proposed by 
the distributor or its affiliates, in cost-effective rank 
order. The model plan shall also address the process 
that will be used by the distributor to identify and 
obtain further electricity or natural gas savings in 
the event that insufficient savings are procured 
through the bid process. 
‘‘(3) DEVELOPMENT OF MODEL LANGUAGE ON 
REVENUE DECOUPLING AND SHAREHOLDER INCEN-
TIVES IN RATEMAKING POLICIES.—Rate-setting and 
earnings for State-regulated electricity and natural 
gas distributors that participate in successful, cost- 
effective energy efficiency programs. Such model 
language shall include, but not be limited to, rec-
ommendations for decoupling the earnings of such 
regulated entities from full dependence on the vol-
ume of electricity or natural gas distributed by them 
to customer facilities. Such model language shall 
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also include recommendations for policies for cost re-
covery and shareholder incentives, such that electric 
and gas utility investors are rewarded similarly for 
similar levels of investment in customer energy effi-
ciency and in conventional utility assets. 
‘‘(i) STATE ADOPTION OF FERC MODEL PROVI-
SIONS.—Each State utility regulatory authority shall 
adopt the model provisions referred to in subsection (h) 
in the same manner and subject to the same rules and 
review as apply in the case of standards referred to in 
section 113(b) and 303(b). For purposes of any provision 
of title I or III of this Act, the model provisions referred 
to in subsection (h) shall be treated as standards under 
section 113(b) (in the case of State regulated electricity 
distributors) or 303(b) (in the case of natural gas distribu-
tors), except that in the case of such model provisions, 
any reference contained in this Act to the date of enact-
ment of this Act shall be deemed to be a reference to the 
date of enactment of this section. Each such State utility 
regulatory authority shall shall adopt the model provisions 
not later than 24 months after the date of enactment of 
this section in the case of paragraphs (1) and (2) of sub-
section (h) or 42 months after such date of enactment in 
the case of paragraph (3) of subsection (h).’’. 
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(b) TABLE OF CONTENTS.—The table of contents for 
title VI of such Act is amended by adding the following 
new items at the end thereof: 
‘‘Sec. 609. Rural and remote communities electrification grants. 
‘‘Sec. 610. Efficiency resource standard for retail electricity and natural gas 
distributors.’’. 
Æ 
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