165
through the Clean Cities Program of the Department of 
Energy, to provide not more than 10 geographically dis-
persed project grants to State governments, local govern-
ments, or metropolitan transportation authorities to carry 
out a project or projects for the purposes described in sub-
section (b). 
(b) GRANT PURPOSES.—Grants under this section 
may be used for the following purposes: 
(1) The acquisition of alternative fueled vehicles 
or fuel cell vehicles, including—
(A) passenger vehicles including neighbor-
hood electric vehicles; and 
(B) motorized two-wheel bicycles, scooters, 
or other vehicles for use by law enforcement 
personnel or other State or local government or 
metropolitan transportation authority employ-
ees. 
(2) The acquisition of alternative fueled vehi-
cles, hybrid vehicles, or fuel cell vehicles, including—
(A) buses used for public transportation or 
transportation to and from schools; 
(B) delivery vehicles for goods or services; 
and
166
(C) ground support vehicles at public air-
ports, including vehicles to carry baggage or 
push airplanes away from terminal gates. 
(3) The acquisition of ultra-low sulfur diesel ve-
hicles. 
(4) Infrastructure necessary to directly support 
an alternative fueled vehicle, fuel cell vehicle, or hy-
brid vehicle project funded by the grant, including 
fueling and other support equipment. 
(5) Operation and maintenance of vehicles, in-
frastructure, and equipment acquired as part of a 
project funded by the grant. 
(c) APPLICATIONS.—
(1) REQUIREMENTS.—The Secretary shall issue 
requirements for applying for grants under the pilot 
program. At a minimum, the Secretary shall require 
that applications be submitted by the head of a 
State or local government or a metropolitan trans-
portation authority, or any combination thereof, and 
a registered participant in the Clean Cities Program 
of the Department of Energy, and shall include—
(A) a description of the projects proposed 
in the application, including how they meet the 
requirements of this subtitle;
167
(B) an estimate of the ridership or degree 
of use of the projects proposed in the applica-
tion; 
(C) an estimate of the air pollution emis-
sions reduced and fossil fuel displaced as a re-
sult of the projects proposed in the application, 
and a plan to collect and disseminate environ-
mental data, related to the projects to be fund-
ed under the grant, over the life of the projects; 
(D) a description of how the projects pro-
posed in the application will be sustainable 
without Federal assistance after the completion 
of the term of the grant; 
(E) a complete description of the costs of 
each project proposed in the application, includ-
ing acquisition, construction, operation, and 
maintenance costs over the expected life of the 
project; 
(F) a description of which costs of the 
projects proposed in the application will be sup-
ported by Federal assistance under this subtitle; 
and 
(G) documentation to the satisfaction of 
the Secretary that diesel fuel containing sulfur 
at not more than 15 parts per million is avail-
168
able for carrying out the projects, and a com-
mitment by the applicant to use such fuel in 
carrying out the projects. 
(2) PARTNERS.—An applicant under paragraph 
(1) may carry out projects under the pilot program 
in partnership with public and private entities. 
(d) SELECTION CRITERIA.—In evaluating applica-
tions under the pilot program, the Secretary shall consider 
each applicant’s previous experience with similar projects 
and shall give priority consideration to applications that—
(1) are most likely to maximize protection of 
the environment; 
(2) demonstrate the greatest commitment on 
the part of the applicant to ensure funding for the 
proposed projects and the greatest likelihood that 
each project proposed in the application will be 
maintained or expanded after Federal assistance 
under this subtitle is completed; and 
(3) exceed the minimum requirements of sub-
section (c)(1)(A). 
(e) PILOT PROJECT REQUIREMENTS.—
(1) MAXIMUM
AMOUNT.—The Secretary shall 
not provide more than $20,000,000 in Federal as-
sistance under the pilot program to any applicant.
169
(2) COST SHARING.—The Secretary shall not 
provide more than 50 percent of the cost, incurred 
during the period of the grant, of any project under 
the pilot program. 
(3) MAXIMUM PERIOD OF GRANTS.—The Sec-
retary shall not fund any applicant under the pilot 
program for more than 5 years. 
(4) DEPLOYMENT
AND
DISTRIBUTION.—The 
Secretary shall seek to the maximum extent prac-
ticable to ensure a broad geographic distribution of 
project sites. 
(5) TRANSFER OF INFORMATION AND KNOWL-
EDGE.—The Secretary shall establish mechanisms to 
ensure that the information and knowledge gained 
by participants in the pilot program are transferred 
among the pilot program participants and to other 
interested parties, including other applicants that 
submitted applications. 
(f) SCHEDULE.—
(1) PUBLICATION.—Not later than 3 months 
after the date of the enactment of this Act, the Sec-
retary shall publish in the Federal Register, Com-
merce Business Daily, and elsewhere as appropriate, 
a request for applications to undertake projects
170
under the pilot program. Applications shall be due 
within 6 months of the publication of the notice. 
(2) SELECTION.—Not later than 6 months after 
the date by which applications for grants are due, 
the Secretary shall select by competitive, peer review 
all applications for projects to be awarded a grant 
under the pilot program. 
(g) LIMIT ON FUNDING.—The Secretary shall pro-
vide not less than 20 percent and not more than 25 per-
cent of the grant funding made available under this sec-
tion for the acquisition of ultra-low sulfur diesel vehicles. 
SEC. 15023. REPORTS TO CONGRESS. 
(a) INITIAL REPORT.—Not later than 2 months after 
the date grants are awarded under this subtitle, the Sec-
retary shall transmit to the Congress a report con-
taining—
(1) an identification of the grant recipients and 
a description of the projects to be funded; 
(2) an identification of other applicants that 
submitted applications for the pilot program; and 
(3) a description of the mechanisms used by the 
Secretary to ensure that the information and knowl-
edge gained by participants in the pilot program are 
transferred among the pilot program participants
171
and to other interested parties, including other ap-
plicants that submitted applications. 
(b) EVALUATION.—Not later than 3 years after the 
date of the enactment of this Act, and annually thereafter 
until the pilot program ends, the Secretary shall transmit 
to the Congress a report containing an evaluation of the 
effectiveness of the pilot program, including an assessment 
of the benefits to the environment derived from the 
projects included in the pilot program as well as an esti-
mate of the potential benefits to the environment to be 
derived from widespread application of alternative fueled 
vehicles and ultra-low sulfur diesel vehicles. 
SEC. 15024. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary $200,000,000 to carry out this subtitle, to remain 
available until expended. 
Subtitle C—Hydrogen Fuel Cell 
Heavy-Duty Vehicles 
SEC. 15031. DEFINITION. 
For the purposes of this subtitle, the term ‘‘advanced 
vehicle technologies program’’ means the program created 
pursuant to section 5506 of title 49, United States Code. 
SEC. 15032. FINDINGS. 
The Congress makes the following findings:
172
(1) The Department of Energy and the Depart-
ment of Transportation jointly developed the consor-
tium-based advanced vehicle technologies program to 
develop energy efficient and clean heavy-duty vehi-
cles in 1998. 
(2) The majority of clean fuel vehicles in oper-
ation today are transit buses. 
(3) Hydrogen fuel cell heavy-duty vehicle bus 
deployments can most appropriately advance hydro-
gen fuel cell technology development due to central-
ized refueling, stable duty cycles, and fixed routes. 
(4) Hydrogen fuel cell heavy-duty vehicle bus 
deployments are the most effective manner in which 
to advance technology developments for public 
awareness, consumption, and acceptance. 
SEC. 15033. HYDROGEN FUEL CELL BUSES. 
The Secretary of Energy, through the advanced vehi-
cle technologies program, in coordination with the Sec-
retary of Transportation, shall advance the development 
of fuel cell bus technologies by providing funding for 4 
demonstration sites that—
(1) have or will soon have hydrogen infrastruc-
ture for fuel cell bus operation; and 
(2) are operated by entities with experience in 
the development of fuel cell bus technologies,
173
to enable the widespread utilization of fuel cell buses. Such 
demonstrations shall address the reliability of fuel cell 
heavy-duty vehicles, expense, infrastructure, containment, 
storage, safety, training, and other issues. 
SEC. 15034. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary of Energy $10,000,000 for each of the fiscal years 
2004 through 2008 for carrying out this subtitle. 
Subtitle D—Miscellaneous 
SEC. 15041. RAILROAD EFFICIENCY. 
(a) ESTABLISHMENT.—The Secretary shall, in con-
junction with the Secretary of Transportation and the Ad-
ministrator of the Environmental Protection Agency, es-
tablish a public-private research partnership involving the 
Federal Government, the railroad industry, locomotive 
manufacturers and equipment suppliers, and the research 
facility owned by the Federal Railroad Administration and 
operated by contract. The goal of the research partnership 
shall include developing and demonstrating locomotive 
technologies that increase fuel economy, reduce emissions, 
and lower costs. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out the require-
ments of this section $25,000,000 for fiscal year 2004,
174
$30,000,000 for fiscal year 2005, and $35,000,000 for fis-
cal year 2006. 
SEC. 15042. MOBILE EMISSION REDUCTIONS TRADING AND 
CREDITING. 
Within 180 days after the date of enactment of this 
Act, the Administrator of the Environmental Protection 
Agency shall provide a report to the Congress on the Envi-
ronmental Protection Agency’s experience with the trading 
of mobile source emission reduction credits for use by own-
ers and operators of stationary source emission sources 
to meet emission offset requirements within a nonattain-
ment area. The report shall describe—
(1) projects approved by the Environmental 
Protection Agency that include the trading of mobile 
source emission reduction credits for use by sta-
tionary sources in complying with offset require-
ments, including project and stationary sources loca-
tion, volumes of emissions offset and traded, a de-
scription of the sources of mobile emission reduction 
credits, and, if available, the cost of the credits; 
(2) the significant issues identified by the Envi-
ronmental Protection Agency in its consideration 
and approval of trading in such projects; 
(3) the requirements for monitoring and assess-
ing the air quality benefits of any approved project;
175
(4) the statutory authority upon which the En-
vironmental Protection Agency has based approval 
of such projects; 
(5) an evaluation of how the resolution of issues 
in approved projects could be utilized in other 
projects; and 
(6) any other issues the Environmental Protec-
tion Agency considers relevant to the trading and 
generation of mobile source emission reduction cred-
its for use by stationary sources or for other pur-
poses. 
SEC. 15043. IDLE REDUCTION TECHNOLOGIES. 
(a) DEFINITIONS.—For purposes of this section: 
(1) IDLE REDUCTION TECHNOLOGY.—The term 
‘‘idle reduction technology’’ means a device or sys-
tem of devices utilized to reduce long-duration idling 
of a heavy-duty vehicle. 
(2) HEAVY-DUTY VEHICLE.—The term ‘‘heavy-
duty vehicle’’ means a vehicle that has a gross vehi-
cle weight rating greater than 26,000 pounds and is 
powered by a diesel engine. 
(3) LONG-DURATION IDLING.—The term ‘‘long-
duration idling’’ means the operation of a main drive 
engine, for a period greater than 15 consecutive 
minutes, where the main drive engine is not engaged
176
in gear. Such term does not apply to routine stop-
pages associated with traffic movement or conges-
tion. 
(b) STUDIES OF THE BENEFITS OF IDLE REDUCTION 
TECHNOLOGIES.—
(1) POTENTIAL FUEL SAVINGS.—Not later than 
90 days after the date of enactment of this section, 
the Secretary of Energy shall, in consultation with 
the Secretary of Transportation, commence a study 
to analyze the potential fuel savings resulting from 
use of idle reduction technologies. 
(2) RECOGNITION OF BENEFITS OF ADVANCED 
IDLE REDUCTION TECHNOLOGIES.—Within 90 days 
after the date of enactment of this section, the Ad-
ministrator of the Environmental Protection Agency 
is directed to commence a review of the Agency’s 
mobile source air emissions models used under the 
Clean Air Act to determine whether such models ac-
curately reflect the emissions resulting from long-du-
ration idling of heavy-duty trucks and other vehicles 
and engines, and shall update those models as the 
Administrator deems appropriate. Additionally, with-
in 90 days after the date of enactment of this sec-
tion, the Administrator shall commence a review as 
to the appropriate emissions reductions credit that
177
should be allotted under the Clean Air Act for the 
use of advanced idle reduction technologies, and 
whether such credits should be subject to an emis-
sions trading system, and shall revise Agency regula-
tions and guidance as the Administrator deems ap-
propriate. 
(3) IDLING
TECHNOLOGIES.—Not later than 
180 days after the date of the enactment of this sec-
tion, the Secretary of Energy, in consultation with 
the Secretary of Transportation and the Adminis-
trator of the Environmental Protection Agency, shall 
commence a study to analyze where heavy duty and 
other vehicles stop for long duration idling. 
(c) VEHICLE WEIGHT EXEMPTION.—Section 127(a) 
of title 23, United States Code, is amended by adding at 
the end the following: ‘‘In instances where an idle reduc-
tion technology is installed onboard a motor vehicle, the 
maximum gross vehicle weight limit and the axle weight 
limit for any motor vehicle equipped with an idling reduc-
tion system may be increased by an amount necessary to 
compensate for the additional weight of the idling reduc-
tion system, except that the weight limit increase shall be 
no greater than 400 pounds.’’.
178
SEC. 15044. STUDY OF AVIATION FUEL CONSERVATION AND 
EMISSIONS. 
The Administrator of the Federal Aviation Adminis-
tration and the Administrator of the Environmental Pro-
tection Agency shall jointly commence a study within 60 
days after the date of enactment of this Act to identify 
the impact of aircraft emissions on air quality in non-
attainment areas and to identify ways to promote fuel con-
servation measures for aviation, enhance fuel efficiency, 
and reduce emissions. As part of this study, the Adminis-
trator of the Federal Aviation Administration and the Ad-
ministrator of the Environmental Protection Agency shall 
focus on how air traffic management inefficiencies, such 
as aircraft idling at airports, result in unnecessary fuel 
burn and air emissions. Within 180 days after the com-
mencement of the study, the Administrator of the Federal 
Aviation Administration and the Administrator of the En-
vironmental Protection Agency shall submit a report to 
the Committees on Energy and Commerce and Transpor-
tation and Infrastructure of the House of Representatives 
and the Committees on Environment and Public Works 
and Commerce, Science, and Transportation of the Senate 
containing the results of the study and recommendations 
as to how unnecessary fuel use and emissions affecting 
air quality may be reduced, without impacting safety and 
security, increasing individual aircraft noise, and taking
179
into account all aircraft emissions and their relative im-
pact on human health. 
SEC. 15045. DIESEL FUELED VEHICLES. 
(a) DIESEL COMBUSTION AND AFTER TREATMENT 
TECHNOLOGIES.—The Secretary of Energy shall accel-
erate efforts to improve diesel combustion and after-treat-
ment technologies for use in diesel fueled motor vehicles. 
(b) GOAL.—
(1) COMPLIANCE
WITH
TIER
EMISSION 
STANDARDS BY 2010.—The Secretary shall carry out 
subsection (a) with a view to developing and dem-
onstrating diesel technology meeting tier 2 emission 
standards not later than 2010. 
(2) TIER 2 EMISSION STANDARDS DEFINED.—
In this subsection, the term ‘‘tier 2 emission stand-
ards’’ means the motor vehicle emission standards 
promulgated by the Administrator of the Environ-
mental Protection Agency on February 10, 2000, 
under sections 202 and 211 of the Clean Air Act to 
apply to passenger cars, light trucks, and larger pas-
senger vehicles of model years after the 2003 vehicle 
model year.
180
SEC. 15046. WAIVERS OF ALTERNATIVE FUELED VEHICLE 
FUELING REQUIREMENT. 
Section 400AA(a)(3)(E) of the Energy Policy and 
Conservation Act (42 U.S.C. 6374(a)(3)(E)) is amended 
to read as follows: 
‘‘(E)(i) Dual fueled vehicles acquired pursuant to this 
section shall be operated on alternative fuels unless the 
Secretary determines that an agency needs a waiver of 
such requirement for vehicles in the fleet of the agency 
in a particular geographic area where—
‘‘(I) the alternative fuel otherwise required to 
be used in the vehicle is not reasonably available to 
retail purchasers of the fuel, as certified to the Sec-
retary by the head of the agency; or 
‘‘(II) the cost of the alternative fuel otherwise 
required to be used in the vehicle is unreasonably 
more expensive compared to gasoline, as certified by 
the head of the agency. 
‘‘(ii) The Secretary shall monitor compliance with 
this subparagraph by all such fleets and shall report annu-
ally to the Congress on the extent to which the require-
ments of this subparagraph are being achieved. The report 
shall include information on annual reductions achieved 
of petroleum-based fuels and the problems, if any, encoun-
tered in acquiring alternative fuels.’’.
181
SEC. 15047. TOTAL INTEGRATED THERMAL SYSTEMS. 
The Secretary shall—
(1) conduct a study of the benefits of total inte-
grated thermal systems in reducing demand for oil 
and protecting the environment; and 
(2) examine the feasibility of using total inte-
grated thermal systems in Department of Defense 
and other Federal motor vehicle fleets. 
SEC. 15048. OIL BYPASS FILTRATION TECHNOLOGY. 
The Secretary of Energy and the Administrator of 
the Environmental Protection Agency shall—
(1) conduct a joint study of the benefits of oil 
bypass filtration technology in reducing demand for 
oil and protecting the environment; and 
(2) examine the feasibility of using oil bypass 
filtration technology in Federal motor vehicle fleets.
SEC. 15049. NATURAL GAS CONDENSATE STUDY. 
Not later than 18 months after the date of enactment 
of this Act, the Secretary of Energy, in consultation with 
the Administrator of the Environmental Protection Agen-
cy, shall transmit to the Congress the results of a study 
to consider fuels derived from natural gas condensate and 
the appropriate blending of such condensates. The study 
shall consider—
(1) usage options; 
(2) potential volume capacities;
182
(3) costs; 
(4) air emissions; 
(5) fuel efficiencies; and 
(6) potential use in the Federal fleet program 
under title III of the Energy Policy Act of 1992 (42 
U.S.C. 13201 et seq.).
TITLE VI—ELECTRICITY 
Subtitle A—Transmission Capacity 
SEC. 16011. TRANSMISSION INFRASTRUCTURE IMPROVE-
MENT RULEMAKING. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding the following new section at 
the end thereof: 
‘‘SEC. 215. TRANSMISSION INFRASTRUCTURE IMPROVE-
MENT RULEMAKING. 
‘‘(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) transmission rate treatments 
to promote capital investment in the enlargement and im-
provement of facilities for the transmission of electric en-
ergy in interstate commerce as appropriate to—
‘‘(1) promote economically efficient trans-
mission and generation of electricity;
183
‘‘(2) provide a return on equity that attracts 
new investment in transmission facilities and reason-
ably reflects the risks taken by public utilities in re-
structuring control of transmission assets; and 
‘‘(3) encourage deployment of transmission 
technologies and other measures to increase the ca-
pacity and efficiency of existing transmission facili-
ties and improve the operation of such facilities. 
The Commission may, from time to time, revise such rule. 
‘‘(b) FUNDING OF CERTAIN FACILITIES.—The rule 
promulgated pursuant to this section shall provide that, 
upon the request of a regional transmission organization 
or other Commission-approved transmission organization, 
new transmission facilities that increase the transfer capa-
bility of the transmission system shall be participant fund-
ed. In such rules, the Commission shall also provide guid-
ance as to what types of facilities may be participant fund-
ed. 
‘‘(c) JUST AND REASONABLE RATES.—With respect 
to any transmission rate filed with the Commission on or 
after the effective date of the rule promulgated under this 
section, the Commission shall, in its review of such rate 
under sections 205 and 206, apply the rules adopted pur-
suant to this section, including any revisions thereto. 
Nothing in this section shall be construed to override,
184
weaken, or conflict with the procedural and other require-
ments of this part, including the requirement of sections 
205 and 206 that all rates, charges, terms, and conditions 
be just and reasonable and not unduly discriminatory or 
preferential.’’.
SEC. 16012. SITING OF INTERSTATE ELECTRICAL 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: 
‘‘SEC. 216. SITING OF INTERSTATE ELECTRICAL TRANS-
MISSION FACILITIES 
‘‘(a) TRANSMISSION
STUDIES.—Within one year 
after the enactment of this section, and every 3 years 
thereafter, the Secretary of Energy shall conduct a study 
of electric transmission congestion. After considering al-
ternatives and recommendations from interested parties 
the Secretary shall issue a report, based on such study, 
which may designate one or more geographic areas experi-
encing electric energy transmission congestion as ‘inter-
state congestion areas’. 
‘‘(b) CONSTRUCTION PERMIT.—The Commission is 
authorized, after notice and an opportunity for hearing, 
to issue permits for the construction or modification of 
electric transmission facilities in interstate congestion
226
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. 
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.