I
106TH CONGRESS
2D SESSION
H. R. 4655
To direct the Secretary of Energy to sell the fossil-fuel and nuclear generation
facilities and the electric power transmission facilities of the Tennessee
Valley Authority, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 14, 2000
Mr. FRELINGHUYSEN (for himself, Mr. FRANKS of New Jersey, Mr. FOLEY,
and Mr. MEEHAN) introduced the following bill; which was referred to the
Committee on Transportation and Infrastructure, and in addition to the
Committee on Commerce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned
A BILL
To direct the Secretary of Energy to sell the fossil-fuel
and nuclear generation facilities and the electric power
transmission facilities of the Tennessee Valley Authority,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Tennessee Valley Au-
thority Power Competition Act of 2000’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—Congress finds that—
(1) current consumers of electricity generated
by the Tennessee Valley Authority would benefit
from the lower costs, reduced pollution, and in-
creased efficiencies associated with competition;
(2) the United States has encouraged other
countries to privatize their government-owned power
facilities; and
(3) with the emergence of competitive power
markets in the United States, the Federal Govern-
ment should ensure that its own utilities do not
enjoy artificial competitive advantages.
(b) PURPOSES.—The purposes of this Act are—
(1) to bring the benefits of competition to the
consumers of Tennessee Valley Authority power;
(2) direct the Secretary of Energy to sell, using
a competitive bidding procedure, certain federally
owned generation and transmission facilities of the
Tennessee Valley Authority; and
(3) ensure that power from the Tennessee Val-
ley Authority’s hydroelectric dams is sold at market
rates.
SEC. 3. SALE OF FOSSIL-FUEL AND NUCLEAR GENERATION
AND ELECTRIC TRANSMISSION FACILITIES.
(a) SALE OF FACILITIES.—In accordance with this
Act, the Secretary of Energy (in this Act referred to as
the ‘‘Secretary’’) shall sell the fossil-fuel and nuclear
power generation and electric power transmission facilities
owned and operated by the Tennessee Valley Authority.
(b) COMPETITIVE BIDDING.—
(1) IN GENERAL.—In order to ensure that the
facilities are transferred in a manner that provides
a reasonable payment to the United States, the Sec-
retary shall conduct sales under this section using a
competitive bidding process open to all bidders—
(A) that the Secretary considers to be fi-
nancially qualified and to have the experience
and resources necessary to manage the trans-
ferred facilities; and
(B) that are entities incorporated or orga-
nized in the United States or United States
citizens who reside principally within the United
States.
(2) MINIMUM BID.—
(A) IN GENERAL.—No facility may be sold
under this section for an amount less than the
minimum bid, as determined by the Secretary
in accordance with subparagraph (B).
(B) CALCULATION OF AMOUNT.—The min-
imum bid for any facility sold under this section
shall be equal to the net present value of the
outstanding debt attributable to the facility.
(c) COOPERATION OF OTHER AGENCIES.—The Ten-
nessee Valley Authority and heads of other affected Fed-
eral departments and agencies shall assist the Secretary
in implementing the sale of facilities under this section.
(d) FINANCIAL AND BID MANAGEMENT ADVISOR.—
(1) RETENTION OF ADVISOR.—
(A) IN
GENERAL.—Not later than 180
days after the date of enactment of this Act,
the Secretary shall retain an experienced pri-
vate sector firm to serve as financial, bid man-
agement, and technical advisor (referred to in
this Act as the ‘‘Advisor’’) with respect to sales
under this section.
(B) FINANCIAL
INTEREST.—The Advisor
may not have any substantial financial interest
in—
(i) the facilities to be sold under this
section;
(ii) the operation of such facilities; or
(iii) the purchasers of such facilities.
(2) NOTICE.—Not later than 180 days after the
date of enactment of this Act, the Secretary shall
publish a notice in the Federal Register soliciting all
parties that have an operational or ownership inter-
est in facilities to be sold under this section to pro-
vide evidence of such interest not later than 90 days
after publication of the notice.
(3) ADVISOR’S REPORT.—Not later than 180
days after being retained by the Secretary, based on
information provided by the Tennessee Valley Au-
thority and the Secretary and the information ob-
tained under paragraph (2), the Advisor shall sub-
mit to the Secretary a report containing each of the
following:
(A) A plan for the competitive sale of all
facilities described in subsection (a).
(B) An estimate of the net present value of
the revenue expected to be derived from each
such facility during the 50-year period begin-
ning on the date of the report.
(C) An estimate of the net present value of
the expenses expected to be incurred in connec-
tion with each such facility during the 50-year
period beginning on the date of the report.
(D) An analysis of the relationships among
the estimate described in subparagraph (B), the
estimate described in subparagraph (C), and
the net present value of the outstanding debt
attributable to each such facility.
(E) An analysis of options for grouping fa-
cilities for sale under this section so as to real-
ize the greatest return to the United States.
(4) STRUCTURE
OF
SALES.—The plan sub-
mitted under paragraph (3)(A) shall provide for—
(A) the sale of facilities in a manner that
ensures that the United States receives a rea-
sonable payment for each sale; and
(B) subject to subparagraph (A), the sale
of facilities by project, unless the Advisor pro-
vides satisfactory information to the Secretary
that an alternative structure is in the interests
of the United States.
(e) COSTS OF SALES.—
(1) IN GENERAL.—The Secretary may use not
more than $15,000,000 from unobligated balances
available to the Department of Energy for the costs
of preparing for and conducting the sale of facilities
under this section.
(2) REPORT TO CONGRESS.—Not later than 60
days after the completion of the sale of all facilities
under this section, the Secretary shall transmit to
the Committee on Transportation and Infrastructure
of the House of Representatives, and to the Com-
mittee on Environment and Public Works of the
Senate, an accounting of all costs described in para-
graph (1) and any studies prepared by the Secretary
related to such costs.
(f) PROCEEDS OF SALES.—
(1) IN GENERAL.—The proceeds of any sale of
facilities under this section shall be applied by the
Secretary as follows:
(A) First, to offset the costs of carrying
out the sale.
(B) Second, to pay the outstanding debt
attributable to such facilities.
(2) REMAINING FUNDS.—Any proceeds remain-
ing after the payment of costs under paragraph (1)
shall be deposited in the Treasury of the United
States as miscellaneous receipts.
(g) TREATMENT OF SALES FOR PURPOSES OF CER-
TAIN LAWS.—The sale of facilities under this Act shall
not be considered a disposal of Federal surplus property
under the following provisions of law:
(1) Section 203 of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C.
484).
(2) Section 13 of the Surplus Property Act of
1944 (50 U.S.C. App. 1622).
(h) CONTRACTS, OBLIGATIONS, AND LAWSUITS.—
(1) IN GENERAL.—Each sale under this section
shall be subject to all contracts, debt obligations to
non-Federal entities, operational objectives, and
other binding agreements that apply, as of the date
of such sale, to the facilities sold and to the sale of
electric power from such facilities.
(2) ASSUMPTION.—The purchasers of facilities
sold under this section shall assume all liabilities
and obligations of the Tennessee Valley Authority
under the contracts, obligations, or other agreements
described in paragraph (1).
(3) NEW CONTRACTS AND OBLIGATIONS.—After
the date of enactment of this Act, the Tennessee
Valley Authority may not, with respect to any facil-
ity to be sold under this section, enter into any long-
term agreement, contract, or other long-term obliga-
tion or responsibility, unless such agreement, con-
tract, obligation, or responsibility enhances or main-
tains the value of such facility.
(4) LAWSUITS.—
(A) IN GENERAL.—After the sale of any
facility under this section, the Tennessee Valley
Authority shall retain the responsibility for con-
cluding any lawsuits associated with the facility,
whether acting as a plaintiff or a defendant.
(B) TRANSFER OF CERTAIN RIGHTS, TI-
TLES, AND INTERESTS.—Any right, title, or in-
terest held by the United States at the conclu-
sion of a lawsuit described in subparagraph (A)
and which, but for the lawsuit, would have been
transferred as part of a sale of a facility under
this section, shall be transferred to the party in
interest who purchased the facility.
(i) REPORT
TO FEDERAL ENERGY REGULATORY
COMMISSION.—Not later than 180 days after the date of
enactment of this Act, the Secretary shall provide to the
Federal Energy Regulatory Commission each of the fol-
lowing:
(1) A description of—
(A) each of the assets, tangible or intan-
gible, that comprise each facility to be sold
under this section;
(B) the existing terms of operation with
respect to each such facility; and
(C) any other interest being proposed for
sale.
(2) The information related to such facilities re-
quired by subparts B, F, and G (other than exhibit
E of subpart G) of title 18, Code of Federal Regula-
tions.
(3) Information regarding the date on which an
offer for purchase of such facilities must be sub-
mitted.
(j) NOTICE OF SALE AND SOLICITATION OF BIDS.—
Not later than 1 year after the date of the enactment of
this Act, the Secretary shall publish a notice in the Fed-
eral Register that includes each of the following:
(1) A description of—
(A) each of the assets, tangible and intan-
gible, that comprise each facility to be sold
under this section;
(B) the existing terms of operation with
respect to each such facility; and
(C) any other interest being proposed for
sale.
(2) Information regarding the date, time, and
conditions for the submission of bids for facilities
sold under this section.
(k) COMPLETION OF SALES.—The Secretary shall
complete all sales under this section not later than 180
days after the publication of notice under subsection (j).
(l) EMPLOYEES.—As a condition of the purchase of
each facility under this section, the Secretary shall require
each purchaser to provide assurances that the purchaser
will, consistent with good business practices, attempt to
offer employment to those former employees of the United
States who are necessary to the continued operation of the
facility.
(m) FEDERAL ENERGY REGULATORY COMMISSION
JURISDICTION.—All rates and charges established for the
wholesale sale of electric power from facilities sold under
this section shall be subject to part 2 of the Federal Power
Act.
SEC. 4. MARKET-BASED RATES FOR HYDROELECTRIC
POWER.
(a) IN GENERAL.—Not later than 1 year after the
date of enactment of this Act, the Secretary shall develop
and implement procedures to ensure that all power pro-
duced by hydroelectric dams owned by the Tennessee Val-
ley Authority is sold at prices that reflect the demand for
and the supply of such power in the relevant bulk power
supply market.