608 
SEC. 965. WESTERN HEMISPHERE ENERGY COOPERATION. 
(a) PROGRAM.—The Secretary shall carry out a pro-
gram to promote cooperation on energy issues with West-
ern Hemisphere countries. 
(b) ACTIVITIES.—Under the program, the Secretary 
shall fund activities to work with Western Hemisphere 
countries to— 
(1) assist the countries in formulating and 
adopting changes in economic policies and other poli-
cies to— 
(A) increase the production of energy sup-
plies; and 
(B) improve energy efficiency; and 
(2) assist in the development and transfer of 
energy supply and efficiency technologies that would 
have a beneficial impact on world energy markets. 
(c) UNIVERSITY PARTICIPATION.—To the extent 
practicable, the Secretary shall carry out the program 
under this section with the participation of universities so 
as to take advantage of the acceptance of universities by 
Western Hemisphere countries as sources of unbiased 
technical and policy expertise when assisting the Secretary 
in— 
(1) evaluating new technologies; 
(2) resolving technical issues;
609 
(3) working with those countries in the develop-
ment of new policies; and 
(4) training policymakers, particularly in the 
case of universities that involve the participation of 
minority students, such as Hispanic-serving institu-
tions and Historically Black Colleges and Univer-
sities. 
(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this sec-
tion— 
(1) $8,000,000 for fiscal year 2004; 
(2) $10,000,000 for fiscal year 2005; 
(3) $13,000,000 for fiscal year 2006; 
(4) $16,000,000 for fiscal year 2007; and 
(5) $19,000,000 for fiscal year 2008. 
SEC. 966. WASTE REDUCTION AND USE OF ALTERNATIVES. 
(a) GRANT AUTHORITY.—The Secretary may make 
a single grant to a qualified institution to examine and 
develop the feasibility of burning post-consumer carpet in 
cement kilns as an alternative energy source. The pur-
poses of the grant shall include determining— 
(1) how post-consumer carpet can be burned 
without disrupting kiln operations; 
(2) the extent to which overall kiln emissions 
may be reduced;
610 
(3) the emissions of air pollutants and other 
relevant environmental impacts; and 
(4) how this process provides benefits to both 
cement kiln operations and carpet suppliers. 
(b) QUALIFIED INSTITUTION.—For the purposes of 
subsection (a), a qualified institution is a research-inten-
sive institution of higher education with demonstrated ex-
pertise in the fields of fiber recycling and logistical mod-
eling of carpet waste collection and preparation. 
(c) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for car-
rying out this section $500,000. 
SEC. 967. REPORT ON FUEL CELL TEST CENTER. 
(a) REPORT.—Not later than 1 year after the date 
of enactment of this Act, the Secretary shall transmit to 
Congress a report on the results of a study of the estab-
lishment of a test center for next-generation fuel cells at 
an institution of higher education that has available a con-
tinuous source of hydrogen and access to the electric 
transmission grid. Such report shall include a conceptual 
design for such test center and a projection of the costs 
of establishing the test center. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for car-
rying out this section $500,000.
611 
SEC. 968. ARCTIC ENGINEERING RESEARCH CENTER. 
(a) IN GENERAL.—The Secretary of Energy (referred 
to in this section as the ‘‘Secretary’’) in consultation with 
the Secretary of Transportation and the United States 
Arctic Research Commission shall provide annual grants 
to a university located adjacent to the Arctic Energy Of-
fice of the Department of Energy, to establish and operate 
a university research center to be headquartered in Fair-
banks and to be known as the ‘‘Arctic Engineering Re-
search Center’’ (referred to in this section as the ‘‘Cen-
ter’’). 
(b) PURPOSE.—The purpose of the Center shall be 
to conduct research on, and develop improved methods of, 
construction and use of materials to improve the overall 
performance of roads, bridges, residential, commercial, 
and industrial structures, and other infrastructure in the 
Arctic region, with an emphasis on developing— 
(1) new construction techniques for roads, 
bridges, rail, and related transportation infrastruc-
ture and residential, commercial, and industrial in-
frastructure that are capable of withstanding the 
Arctic environment and using limited energy re-
sources as efficiently as possible; 
(2) technologies and procedures for increasing 
road, bridge, rail, and related transportation infra-
structure and residential, commercial, and industrial
612 
infrastructure safety, reliability, and integrity in the 
Arctic region; 
(3) new materials and improving the perform-
ance and energy efficiency of existing materials for 
the construction of roads, bridges, rail, and related 
transportation infrastructure and residential, com-
mercial, and industrial infrastructure in the Arctic 
region; and 
(4) recommendations for new local, regional, 
and State permitting and building codes to ensure 
transportation and building safety and efficient en-
ergy use when constructing, using, and occupying 
such infrastructure in the Arctic region. 
(c) OBJECTIVES.—The Center shall carry out— 
(1) basic and applied research in the subjects 
described in subsection (b), the products of which 
shall be judged by peers or other experts in the field 
to advance the body of knowledge in road, bridge, 
rail, and infrastructure engineering in the Arctic re-
gion; and 
(2) an ongoing program of technology transfer 
that makes research results available to potential 
users in a form that can be implemented. 
(d) AMOUNT OF GRANT.—For each of fiscal years 
2004 through 2009, the Secretary shall provide a grant
613 
in the amount of $3,000,000 to the institution specified 
in subsection (a) to carry out this section. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$3,000,000 for each of fiscal years 2004 through 2009. 
SEC. 969. BARROW GEOPHYSICAL RESEARCH FACILITY. 
(a) ESTABLISHMENT.—The Secretary of Commerce, 
in consultation with the Secretaries of Energy and the In-
terior, the Director of the National Science Foundation, 
and the Administrator of the Environmental Protection 
Agency, shall establish a joint research facility in Barrow, 
Alaska, to be known as the ‘‘Barrow Geophysical Research 
Facility’’, to support scientific research activities in the 
Arctic. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretaries of 
Commerce, Energy, and the Interior, the Director of the 
National Science Foundation, and the Administrator of 
the Environmental Protection Agency for the planning, 
design, construction, and support of the Barrow Geo-
physical Research Facility $61,000,000. 
SEC. 970. WESTERN MICHIGAN DEMONSTRATION PROJECT. 
The Administrator of the Environmental Protection 
Agency, in consultation with the State of Michigan and 
affected local officials, shall conduct a demonstration
614 
project to address the effect of transported ozone and 
ozone precursors in Southwestern Michigan. The dem-
onstration program shall address projected nonattainment 
areas in Southwestern Michigan that include counties with 
design values for ozone of less than .095 based on years 
2000 to 2002 or the most current 3-year period of air 
quality data. The Administrator shall assess any difficul-
ties such areas may experience in meeting the 8 hour na-
tional ambient air quality standard for ozone due to the 
effect of transported ozone or ozone precursors into the 
areas. The Administrator shall work with State and local 
officials to determine the extent of ozone and ozone pre-
cursor transport, to assess alternatives to achieve compli-
ance with the 8 hour standard apart from local controls, 
and to determine the timeframe in which such compliance 
could take place. The Administrator shall complete this 
demonstration project no later than 2 years after the date 
of enactment of this section and shall not impose any re-
quirement or sanction that might otherwise apply during 
the pendency of the demonstration project. 
Subtitle H—Management 
SEC. 971. AVAILABILITY OF FUNDS. 
Funds authorized to be appropriated to the Depart-
ment under this title shall remain available until expended.
615 
SEC. 972. COST SHARING. 
(a) RESEARCH AND DEVELOPMENT.—Except as oth-
erwise provided in this title, for research and development 
programs carried out under this title the Secretary shall 
require a commitment from non-Federal sources of at 
least 20 percent of the cost of the project. The Secretary 
may reduce or eliminate the non-Federal requirement 
under this subsection if the Secretary determines that the 
research and development is of a basic or fundamental na-
ture or involves technical analyses or educational activi-
ties. 
(b) DEMONSTRATION
AND COMMERCIAL APPLICA-
TION.—Except as otherwise provided in this title, the Sec-
retary shall require at least 50 percent of the costs directly 
and specifically related to any demonstration or commer-
cial application project under this title to be provided from 
non-Federal sources. The Secretary may reduce the non- 
Federal requirement under this subsection if the Secretary 
determines that the reduction is necessary and appropriate 
considering the technological risks involved in the project 
and is necessary to meet the objectives of this title. 
(c) CALCULATION OF AMOUNT.—In calculating the 
amount of the non-Federal commitment under subsection 
(a) or (b), the Secretary may include personnel, services, 
equipment, and other resources.
616 
(d) SIZE OF NON-FEDERAL SHARE.—The Secretary 
may consider the size of the non-Federal share in selecting 
projects. 
SEC. 973. MERIT REVIEW OF PROPOSALS. 
Awards of funds authorized under this title shall be 
made only after an impartial review of the scientific and 
technical merit of the proposals for such awards has been 
carried out by or for the Department. 
SEC. 974. EXTERNAL TECHNICAL REVIEW OF DEPART-
MENTAL PROGRAMS. 
(a) NATIONAL ENERGY RESEARCH AND DEVELOP-
MENT ADVISORY BOARDS.— 
(1) IN GENERAL.—The Secretary shall establish 
1 or more advisory boards to review Department re-
search, development, demonstration, and commercial 
application programs in energy efficiency, renewable 
energy, nuclear energy, and fossil energy. 
(2) EXISTING
ADVISORY
BOARDS.—The Sec-
retary may designate an existing advisory board 
within the Department to fulfill the responsibilities 
of an advisory board under this subsection, and may 
enter into appropriate arrangements with the Na-
tional Academy of Sciences to establish such an ad-
visory board. 
(b) OFFICE OF SCIENCE ADVISORY COMMITTEES.—
617 
(1) UTILIZATION OF EXISTING COMMITTEES.— 
The Secretary shall continue to use the scientific 
program advisory committees chartered under the 
Federal Advisory Committee Act (5 U.S.C. App.) by 
the Office of Science to oversee research and devel-
opment programs under that Office. 
(2) SCIENCE ADVISORY COMMITTEE.— 
(A) ESTABLISHMENT.—There shall be in 
the Office of Science a Science Advisory Com-
mittee that includes the chairs of each of the 
advisory committees described in paragraph (1). 
(B) RESPONSIBILITIES.—The Science Ad-
visory Committee shall— 
(i) serve as the science advisor to the 
Director of the Office of Science; 
(ii) advise the Director with respect to 
the well-being and management of the Na-
tional Laboratories and single-purpose re-
search facilities; 
(iii) advise the Director with respect 
to education and workforce training activi-
ties required for effective short-term and 
long-term basic and applied research ac-
tivities of the Office of Science; and
618 
(iv) advise the Director with respect 
to the well being of the university research 
programs supported by the Office of 
Science. 
(c) MEMBERSHIP.—Each advisory board under this 
section shall consist of persons with appropriate expertise 
representing a diverse range of interests. 
(d) MEETINGS
AND
PURPOSES.—Each advisory 
board under this section shall meet at least semiannually 
to review and advise on the progress made by the respec-
tive research, development, demonstration, and commer-
cial application program or programs. The advisory board 
shall also review the measurable cost and performance- 
based goals for such programs as established under sec-
tion 901(b), and the progress on meeting such goals. 
(e) PERIODIC REVIEWS
AND ASSESSMENTS.—The 
Secretary shall enter into appropriate arrangements with 
the National Academy of Sciences to conduct periodic re-
views and assessments of the programs authorized by this 
title, the measurable cost and performance-based goals for 
such programs as established under section 901(b), if any, 
and the progress on meeting such goals. Such reviews and 
assessments shall be conducted every 5 years, or more 
often as the Secretary considers necessary, and the Sec-
619 
retary shall transmit to Congress reports containing the 
results of all such reviews and assessments. 
SEC. 975. IMPROVED COORDINATION OF TECHNOLOGY 
TRANSFER ACTIVITIES. 
(a) TECHNOLOGY TRANSFER COORDINATOR.—The 
Secretary shall designate a Technology Transfer Coordi-
nator to perform oversight of and policy development for 
technology transfer activities at the Department. The 
Technology Transfer Coordinator shall— 
(1) coordinate the activities of the Technology 
Transfer Working Group; 
(2) oversee the expenditure of funds allocated 
to the Technology Transfer Working Group; and 
(3) coordinate with each technology partnership 
ombudsman appointed under section 11 of the Tech-
nology Transfer Commercialization Act of 2000 (42 
U.S.C. 7261c). 
(b) TECHNOLOGY TRANSFER WORKING GROUP.— 
The Secretary shall establish a Technology Transfer 
Working Group, which shall consist of representatives of 
the National Laboratories and single-purpose research fa-
cilities, to— 
(1) coordinate technology transfer activities oc-
curring at National Laboratories and single-purpose 
research facilities;
620 
(2) exchange information about technology 
transfer practices, including alternative approaches 
to resolution of disputes involving intellectual prop-
erty rights and other technology transfer matters; 
and 
(3) develop and disseminate to the public and 
prospective technology partners information about 
opportunities and procedures for technology transfer 
with the Department, including those related to al-
ternative approaches to resolution of disputes involv-
ing intellectual property rights and other technology 
transfer matters. 
(c) TECHNOLOGY
TRANSFER
RESPONSIBILITY.— 
Nothing in this section shall affect the technology transfer 
responsibilities of Federal employees under the Stevenson- 
Wydler Technology Innovation Act of 1980 (15 U.S.C. 
3701 et seq.). 
SEC. 976. FEDERAL LABORATORY EDUCATIONAL PART-
NERS. 
(a) DISTRIBUTION
OF ROYALTIES RECEIVED
BY 
FEDERAL AGENCIES.—Section 14(a)(1)(B)(v) of the Ste-
venson-Wydler Technology Innovation Act of 1980 (15 
U.S.C. 3710c(a)(1)(B)(v)), is amended to read as follows: 
‘‘(v) for scientific research and develop-
ment and for educational assistance and other
621 
purposes consistent with the missions and ob-
jectives of the agency and the laboratory.’’. 
(b) COOPERATIVE RESEARCH AND DEVELOPMENT 
AGREEMENTS.—Section 12(b)(5)(C) of the Stevenson- 
Wydler Technology Innovation Act of 1980 (15 U.S.C. 
3710a(b)(5)(C)) is amended to read as follows: 
‘‘(C) for scientific research and development 
and for educational assistance consistent with the 
missions and objectives of the agency and the lab-
oratory.’’. 
SEC. 977. INTERAGENCY COOPERATION. 
The Secretary shall enter into discussions with the 
Administrator of the National Aeronautics and Space Ad-
ministration with the goal of reaching an interagency 
working agreement between the 2 agencies that would 
make the National Aeronautics and Space Administra-
tion’s expertise in energy, gained from its existing and 
planned programs, more readily available to the relevant 
research, development, demonstration, and commercial ap-
plications programs of the Department. Technologies to 
be discussed should include the National Aeronautics and 
Space Administration’s modeling, research, development, 
testing, and evaluation of new energy technologies, includ-
ing solar, wind, fuel cells, and hydrogen storage and dis-
tribution.
622 
SEC. 978. TECHNOLOGY INFRASTRUCTURE PROGRAM. 
(a) ESTABLISHMENT.—The Secretary shall establish 
a Technology Infrastructure Program in accordance with 
this section. 
(b) PURPOSE.—The purpose of the Technology Infra-
structure Program shall be to improve the ability of Na-
tional Laboratories and single-purpose research facilities 
to support departmental missions by— 
(1) stimulating the development of technology 
clusters that can support departmental missions at 
the National Laboratories or single-purpose research 
facilities; 
(2) improving the ability of National Labora-
tories and single-purpose research facilities to lever-
age and benefit from commercial research, tech-
nology, products, processes, and services; and 
(3) encouraging the exchange of scientific and 
technological expertise between National Labora-
tories or single-purpose research facilities and enti-
ties that can support departmental missions at the 
National Laboratories or single-purpose research fa-
cilities, such as institutions of higher education; 
technology-related business concerns; nonprofit insti-
tutions; and agencies of State, tribal, or local gov-
ernments.
623 
(c) PROJECTS.—The Secretary shall authorize the 
Director of each National Laboratory or single-purpose re-
search facility to implement the Technology Infrastructure 
Program at such National Laboratory or facility through 
projects that meet the requirements of subsections (d) and 
(e). 
(d) PROGRAM REQUIREMENTS.—Each project funded 
under this section shall meet the following requirements: 
(1) Each project shall include at least 1 of each 
of the following entities: a business; an institution of 
higher education; a nonprofit institution; and an 
agency of a State, local, or tribal government. 
(2) Not less than 50 percent of the costs of 
each project funded under this section shall be pro-
vided from non-Federal sources. The calculation of 
costs paid by the non-Federal sources to a project 
shall include cash, personnel, services, equipment, 
and other resources expended on the project after 
start of the project. Independent research and devel-
opment expenses of Government contractors that 
qualify for reimbursement under section 31.205– 
18(e) of the Federal Acquisition Regulation issued 
pursuant to section 25(c)(1) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 421(c)(1)) may 
be credited toward costs paid by non-Federal sources
624 
to a project, if the expenses meet the other require-
ments of this section. 
(3) All projects under this section shall be com-
petitively selected using procedures determined by 
the Secretary. 
(4) Any participant that receives funds under 
this section may use generally accepted accounting 
principles for maintaining accounts, books, and 
records relating to the project. 
(5) No Federal funds shall be made available 
under this section for construction or any project for 
more than 5 years. 
(e) SELECTION CRITERIA.— 
(1) IN GENERAL.—The Secretary shall allocate 
funds under this section only if the Director of the 
National Laboratory or single-purpose research facil-
ity managing the project determines that the project 
is likely to improve the ability of the National Lab-
oratory or single-purpose research facility to achieve 
technical success in meeting departmental missions. 
(2) CRITERIA.—The Secretary shall consider 
the following criteria in selecting a project to receive 
Federal funds: 
(A) The potential of the project to promote 
the development of a commercially sustainable
625 
technology cluster following the period of De-
partment investment, which will derive most of 
the demand for its products or services from 
the private sector, and which will support de-
partmental missions at the participating Na-
tional Laboratory or single-purpose research fa-
cility. 
(B) The potential of the project to promote 
the use of commercial research, technology, 
products, processes, and services by the partici-
pating National Laboratory or single-purpose 
research facility to achieve its mission or the 
commercial development of technological inno-
vations made at the participating National Lab-
oratory or single-purpose research facility. 
(C) The extent to which the project in-
volves a wide variety and number of institutions 
of higher education, nonprofit institutions, and 
technology-related business concerns that can 
support the missions of the participating Na-
tional Laboratory or single-purpose research fa-
cility and that will make substantive contribu-
tions to achieving the goals of the project. 
(D) The extent to which the project fo-
cuses on promoting the development of tech-
626 
nology-related business concerns that are small 
businesses or involves such small businesses 
substantively in the project. 
(E) Such other criteria as the Secretary 
determines to be appropriate. 
(f) ALLOCATION.—In allocating funds for projects 
approved under this section, the Secretary shall provide— 
(1) the Federal share of the project costs; and 
(2) additional funds to the National Laboratory 
or single-purpose research facility managing the 
project to permit the National Laboratory or single- 
purpose research facility to carry out activities relat-
ing to the project, and to coordinate such activities 
with the project. 
(g) REPORT TO CONGRESS.—Not later than July 1, 
2006, the Secretary shall report to Congress on whether 
the Technology Infrastructure Program should be contin-
ued and, if so, how the program should be managed. 
(h) DEFINITIONS.—In this section: 
(1) TECHNOLOGY CLUSTER.—The term ‘‘tech-
nology cluster’’ means a concentration of technology- 
related business concerns, institutions of higher edu-
cation, or nonprofit institutions that reinforce each 
other’s performance in the areas of technology devel-
opment through formal or informal relationships.
627 
(2) TECHNOLOGY-RELATED
BUSINESS
CON-
CERN.—The term ‘‘technology-related business con-
cern’’ means a for-profit corporation, company, asso-
ciation, firm, partnership, or small business concern 
that conducts scientific or engineering research; de-
velops new technologies; manufactures products 
based on new technologies; or performs technological 
services. 
(i) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for ac-
tivities under this section $10,000,000 for each of fiscal 
years 2004, 2005, and 2006. 
SEC. 979. REPROGRAMMING. 
(a) DISTRIBUTION REPORT.—Not later than 60 days 
after the date of the enactment of an Act appropriating 
amounts authorized under this title, the Secretary shall 
transmit to the appropriate authorizing committees of 
Congress a report explaining how such amounts will be 
distributed among the authorizations contained in this 
title. 
(b) PROHIBITION.— 
(1) IN GENERAL.—No amount identified under 
subsection (a) shall be reprogrammed if such re-
programming would result in an obligation which 
changes an individual distribution required to be re-
628 
ported under subsection (a) by more than 5 percent 
unless the Secretary has transmitted to the appro-
priate authorizing committees of Congress a report 
described in subsection (c) and a period of 30 days 
has elapsed after such committees receive the report. 
(2) COMPUTATION.—In the computation of the 
30-day period described in paragraph (1), there shall 
be excluded any day on which either House of Con-
gress is not in session because of an adjournment of 
more than 3 days to a day certain. 
(c) REPROGRAMMING REPORT.—A report referred to 
in subsection (b)(1) shall contain a full and complete 
statement of the action proposed to be taken and the facts 
and circumstances relied on in support of the proposed 
action. 
SEC. 980. CONSTRUCTION WITH OTHER LAWS. 
Except as otherwise provided in this title, the Sec-
retary shall carry out the research, development, dem-
onstration, 
and 
commercial 
application 
programs, 
projects, and activities authorized by this title in accord-
ance with the applicable provisions of the Atomic Energy 
Act of 1954 (42 U.S.C. 2011 et seq.), the Federal Non-
nuclear Research and Development Act of 1974 (42 
U.S.C. 5901 et seq.), the Energy Policy Act of 1992 (42 
U.S.C. 13201 et seq.), the Stevenson-Wydler Technology
629 
Innovation Act of 1980 (15 U.S.C. 3701 et seq.), chapter 
18 of title 35, United States Code (commonly referred to 
as the Bayh-Dole Act), and any other Act under which 
the Secretary is authorized to carry out such activities. 
SEC. 981. REPORT ON RESEARCH AND DEVELOPMENT PRO-
GRAM EVALUATION METHODOLOGIES. 
Not later than 180 days after the date of enactment 
of this Act, the Secretary shall enter into appropriate ar-
rangements with the National Academy of Sciences to in-
vestigate and report on the scientific and technical merits 
of any evaluation methodology currently in use or pro-
posed for use in relation to the scientific and technical pro-
grams of the Department by the Secretary or other Fed-
eral official. Not later than 6 months after receiving the 
report of the National Academy, the Secretary shall sub-
mit such report to Congress, along with any other views 
or plans of the Secretary with respect to the future use 
of such evaluation methodology. 
SEC. 982. DEPARTMENT OF ENERGY SCIENCE AND TECH-
NOLOGY SCHOLARSHIP PROGRAM. 
(a) ESTABLISHMENT OF PROGRAM.— 
(1) IN GENERAL.—The Secretary is authorized 
to establish a Department of Energy Science and 
Technology Scholarship Program to award scholar-
630 
ships to individuals that is designed to recruit and 
prepare students for careers in the Department. 
(2) COMPETITIVE PROCESS.—Individuals shall 
be selected to receive scholarships under this section 
through a competitive process primarily on the basis 
of academic merit, with consideration given to finan-
cial need and the goal of promoting the participation 
of individuals identified in section 33 or 34 of the 
Science and Engineering Equal Opportunities Act 
(42 U.S.C. 1885a or 1885b). 
(3) SERVICE AGREEMENTS.—To carry out the 
Program the Secretary shall enter into contractual 
agreements with individuals selected under para-
graph (2) under which the individuals agree to serve 
as full-time employees of the Department, for the 
period described in subsection (f)(1), in positions 
needed by the Department and for which the individ-
uals are qualified, in exchange for receiving a schol-
arship. 
(b) SCHOLARSHIP ELIGIBILITY.—In order to be eligi-
ble to participate in the Program, an individual must— 
(1) be enrolled or accepted for enrollment as a 
full-time student at an institution of higher edu-
cation in an academic program or field of study de-
631 
scribed in the list made available under subsection 
(d); 
(2) be a United States citizen; and 
(3) at the time of the initial scholarship award, 
not be a Federal employee as defined in section 
2105 of title 5 of the United States Code. 
(c) APPLICATION REQUIRED.—An individual seeking 
a scholarship under this section shall submit an applica-
tion to the Secretary at such time, in such manner, and 
containing such information, agreements, or assurances as 
the Secretary may require. 
(d) ELIGIBLE ACADEMIC PROGRAMS.—The Secretary 
shall make publicly available a list of academic programs 
and fields of study for which scholarships under the Pro-
gram may be utilized, and shall update the list as nec-
essary. 
(e) SCHOLARSHIP REQUIREMENT.— 
(1) IN GENERAL.—The Secretary may provide a 
scholarship under the Program for an academic year 
if the individual applying for the scholarship has 
submitted to the Secretary, as part of the applica-
tion required under subsection (c), a proposed aca-
demic program leading to a degree in a program or 
field of study on the list made available under sub-
section (d).
632 
(2) DURATION OF ELIGIBILITY.—An individual 
may not receive a scholarship under this section for 
more than 4 academic years, unless the Secretary 
grants a waiver. 
(3) 
SCHOLARSHIP
AMOUNT.—The 
dollar 
amount of a scholarship under this section for an 
academic year shall be determined under regulations 
issued by the Secretary, but shall in no case exceed 
the cost of attendance. 
(4) AUTHORIZED
USES.—A scholarship pro-
vided under this section may be expended for tuition, 
fees, and other authorized expenses as established by 
the Secretary by regulation. 
(5) CONTRACTS REGARDING DIRECT PAYMENTS 
TO INSTITUTIONS.—The Secretary may enter into a 
contractual agreement with an institution of higher 
education under which the amounts provided for a 
scholarship under this section for tuition, fees, and 
other authorized expenses are paid directly to the in-
stitution with respect to which the scholarship is 
provided. 
(f) PERIOD OF OBLIGATED SERVICE.— 
(1) DURATION
OF
SERVICE.—The period of 
service for which an individual shall be obligated to 
serve as an employee of the Department is, except
633 
as provided in subsection (h)(2), 24 months for each 
academic year for which a scholarship under this 
section is provided. 
(2) SCHEDULE FOR SERVICE.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), obligated service under para-
graph (1) shall begin not later than 60 days 
after the individual obtains the educational de-
gree for which the scholarship was provided. 
(B) DEFERRAL.—The Secretary may defer 
the obligation of an individual to provide a pe-
riod of service under paragraph (1) if the Sec-
retary determines that such a deferral is appro-
priate. The Secretary shall prescribe the terms 
and conditions under which a service obligation 
may be deferred through regulation. 
(g) PENALTIES
FOR
BREACH
OF
SCHOLARSHIP 
AGREEMENT.— 
(1) FAILURE TO COMPLETE ACADEMIC TRAIN-
ING.—Scholarship recipients who fail to maintain a 
high level of academic standing, as defined by the 
Secretary by regulation, who are dismissed from 
their educational institutions for disciplinary rea-
sons, or who voluntarily terminate academic training 
before graduation from the educational program for
634 
which the scholarship was awarded, shall be in 
breach of their contractual agreement and, in lieu of 
any service obligation arising under such agreement, 
shall be liable to the United States for repayment 
not later than 1 year after the date of default of all 
scholarship funds paid to them and to the institution 
of higher education on their behalf under the agree-
ment, except as provided in subsection (h)(2). The 
repayment period may be extended by the Secretary 
when determined to be necessary, as established by 
regulation. 
(2) FAILURE
TO
BEGIN
OR
COMPLETE
THE 
SERVICE
OBLIGATION
OR
MEET
THE
TERMS
AND 
CONDITIONS OF DEFERMENT.—A scholarship recipi-
ent who, for any reason, fails to begin or complete 
a service obligation under this section after comple-
tion of academic training, or fails to comply with the 
terms and conditions of deferment established by the 
Secretary pursuant to subsection (f)(2)(B), shall be 
in breach of the contractual agreement. When a re-
cipient breaches an agreement for the reasons stated 
in the preceding sentence, the recipient shall be lia-
ble to the United States for an amount equal to—
635 
(A) the total amount of scholarships re-
ceived by such individual under this section; 
plus 
(B) the interest on the amounts of such 
awards which would be payable if at the time 
the awards were received they were loans bear-
ing interest at the maximum legal prevailing 
rate, as determined by the Treasurer of the 
United States, 
multiplied by 3. 
(h) WAIVER OR SUSPENSION OF OBLIGATION.— 
(1) DEATH OF INDIVIDUAL.—Any obligation of 
an individual incurred under the Program (or a con-
tractual agreement thereunder) for service or pay-
ment shall be canceled upon the death of the indi-
vidual. 
(2) IMPOSSIBILITY OR EXTREME HARDSHIP.— 
The Secretary shall by regulation provide for the 
partial or total waiver or suspension of any obliga-
tion of service or payment incurred by an individual 
under the Program (or a contractual agreement 
thereunder) whenever compliance by the individual is 
impossible or would involve extreme hardship to the 
individual, or if enforcement of such obligation with
636 
respect to the individual would be contrary to the 
best interests of the Government. 
(i) DEFINITIONS.—In this section the following defi-
nitions apply: 
(1) COST OF ATTENDANCE.—The term ‘‘cost of 
attendance’’ has the meaning given that term in sec-
tion 472 of the Higher Education Act of 1965 (20 
U.S.C. 1087ll). 
(2) PROGRAM.—The term ‘‘Program’’ means 
the Department of Energy Science and Technology 
Scholarship Program established under this section. 
(j) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for ac-
tivities under this section— 
(1) for fiscal year 2004, $800,000; 
(2) for fiscal year 2005, $1,600,000; 
(3) for fiscal year 2006, $2,000,000; 
(4) for fiscal year 2007, $2,000,000; and 
(5) for fiscal year 2008, $2,000,000. 
SEC. 983. REPORT ON EQUAL EMPLOYMENT OPPORTUNITY 
PRACTICES. 
Not later than 12 months after the date of enactment 
of this Act, and biennially thereafter, the Secretary shall 
transmit to Congress a report on the equal employment
637 
opportunity practices at National Laboratories. Such re-
port shall include— 
(1) a thorough review of each laboratory con-
tractor’s equal employment opportunity policies, in-
cluding promotion to management and professional 
positions and pay raises; 
(2) a statistical report on complaints and their 
disposition in the laboratories; 
(3) a description of how equal employment op-
portunity practices at the laboratories are treated in 
the contract and in calculating award fees for each 
contractor; 
(4) a summary of disciplinary actions and their 
disposition by either the Department or the relevant 
contractors for each laboratory; 
(5) a summary of outreach efforts to attract 
women and minorities to the laboratories; 
(6) a summary of efforts to retain women and 
minorities in the laboratories; and 
(7) a summary of collaboration efforts with the 
Office of Federal Contract Compliance Programs to 
improve equal employment opportunity practices at 
the laboratories.
638 
SEC. 984. SMALL BUSINESS ADVOCACY AND ASSISTANCE. 
(a) SMALL BUSINESS ADVOCATE.—The Secretary 
shall require the Director of each National Laboratory, 
and may require the Director of a single-purpose research 
facility, to designate a small business advocate to— 
(1) increase the participation of small business 
concerns, including socially and economically dis-
advantaged small business concerns, in procurement, 
collaborative research, technology licensing, and 
technology transfer activities conducted by the Na-
tional Laboratory or single-purpose research facility; 
(2) report to the Director of the National Lab-
oratory or single-purpose research facility on the ac-
tual participation of small business concerns, includ-
ing socially and economically disadvantaged small 
business concerns, in procurement, collaborative re-
search, technology licensing, and technology transfer 
activities along with recommendations, if appro-
priate, on how to improve participation; 
(3) make available to small businesses training, 
mentoring, and information on how to participate in 
procurement and collaborative research activities; 
(4) increase the awareness inside the National 
Laboratory or single-purpose research facility of the 
capabilities and opportunities presented by small 
business concerns; and
639 
(5) establish guidelines for the program under 
subsection (b) and report on the effectiveness of 
such program to the Director of the National Lab-
oratory or single-purpose research facility. 
(b) ESTABLISHMENT OF SMALL BUSINESS ASSIST-
ANCE PROGRAM.—The Secretary shall require the Direc-
tor of each National Laboratory, and may require the Di-
rector of a single-purpose research facility, to establish a 
program to provide small business concerns— 
(1) assistance directed at making them more ef-
fective and efficient subcontractors or suppliers to 
the National Laboratory or single-purpose research 
facility; or 
(2) general technical assistance, the cost of 
which shall not exceed $10,000 per instance of as-
sistance, to improve the small business concerns’ 
products or services. 
(c) USE OF FUNDS.—None of the funds expended 
under subsection (b) may be used for direct grants to the 
small business concerns. 
(d) DEFINITIONS.—In this section: 
(1) SMALL
BUSINESS
CONCERN.—The term 
‘‘small business concern’’ has the meaning given 
such term in section 3 of the Small Business Act 
(15 U.S.C. 632).
640 
(2) SOCIALLY AND ECONOMICALLY DISADVAN-
TAGED SMALL BUSINESS CONCERNS.—The term ‘‘so-
cially and economically disadvantaged small business 
concerns’’ has the meaning given such term in sec-
tion 8(a)(4) of the Small Business Act (15 U.S.C. 
637(a)(4)). 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for ac-
tivities under this section $5,000,000 for each of fiscal 
years 2004 through 2008. 
SEC. 985. REPORT ON MOBILITY OF SCIENTIFIC AND TECH-
NICAL PERSONNEL. 
Not later than 2 years after the date of enactment 
of this Act, the Secretary shall transmit a report to Con-
gress identifying any policies or procedures of a contractor 
operating a National Laboratory or single-purpose re-
search facility that create disincentives to the temporary 
transfer of scientific and technical personnel among the 
contractor-operated National Laboratories or contractor- 
operated single-purpose research facilities and provide 
suggestions for improving interlaboratory exchange of sci-
entific and technical personnel. 
SEC. 986. NATIONAL ACADEMY OF SCIENCES REPORT. 
Not later than 90 days after the date of enactment 
of this Act, the Secretary shall enter into an arrangement
641 
with the National Academy of Sciences for the Academy 
to— 
(1) conduct a study on— 
(A) the obstacles to accelerating the com-
mercial application of energy technology; and 
(B) the adequacy of Department policies 
and procedures for, and oversight of, technology 
transfer-related disputes between contractors of 
the Department and the private sector; and 
(2) transmit a report to Congress on rec-
ommendations developed as a result of the study. 
SEC. 987. OUTREACH. 
The Secretary shall ensure that each program au-
thorized by this title includes an outreach component to 
provide information, as appropriate, to manufacturers, 
consumers, engineers, architects, builders, energy service 
companies, institutions of higher education, small busi-
nesses, facility planners and managers, State and local 
governments, and other entities. 
SEC. 988. COMPETITIVE AWARD OF MANAGEMENT CON-
TRACTS. 
None of the funds authorized to be appropriated to 
the Secretary by this title may be used to award a manage-
ment and operating contract for a nonmilitary energy lab-
oratory of the Department unless such contract is com-
642 
petitively awarded or the Secretary grants, on a case-by- 
case basis, a waiver to allow for such a deviation. The Sec-
retary may not delegate the authority to grant such a 
waiver and shall submit to Congress a report notifying 
Congress of the waiver and setting forth the reasons for 
the waiver at least 60 days prior to the date of the award 
of such a contract. 
SEC. 989. EDUCATIONAL PROGRAMS IN SCIENCE AND 
MATHEMATICS. 
(a) ACTIVITIES.—Section 3165(a) of the Department 
of Energy Science Education Enhancement Act (42 
U.S.C. 7381b(a)) is amended by adding at the end the 
following: 
‘‘(14) Support competitive events for students, 
under supervision of teachers, designed to encourage 
student interest and knowledge in science and math-
ematics.’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 
3169 of the Department of Energy Science Education En-
hancement Act (42 U.S.C. 7381e), as so redesignated by 
section 1102(b), is amended by inserting before the period 
‘‘; and $40,000,000 for each of fiscal years 2004 through 
2008’’.
643 
TITLE X—DEPARTMENT OF 
ENERGY MANAGEMENT 
SEC. 1001. ADDITIONAL ASSISTANT SECRETARY POSITION. 
(a) ADDITIONAL ASSISTANT SECRETARY POSITION 
TO ENABLE IMPROVED MANAGEMENT OF NUCLEAR EN-
ERGY ISSUES.— 
(1) IN GENERAL.—Section 203(a) of the De-
partment of Energy Organization Act (42 U.S.C. 
7133(a)) is amended by striking ‘‘six Assistant Sec-
retaries’’ and inserting ‘‘7 Assistant Secretaries’’. 
(2) SENSE OF CONGRESS.—It is the sense of 
Congress that the leadership for departmental mis-
sions in nuclear energy should be at the Assistant 
Secretary level. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) TITLE 5.—Section 5315 of title 5, United 
States Code, is amended by striking ‘‘Assistant Sec-
retaries of Energy (6)’’ and inserting ‘‘Assistant 
Secretaries of Energy (7)’’. 
(2) DEPARTMENT OF ENERGY ORGANIZATION 
ACT.—The table of contents for the Department of 
Energy Organization Act (42 U.S.C. 7101 note) is 
amended— 
(A) by striking ‘‘Section 209’’ and insert-
ing ‘‘Sec. 209’’;
644 
(B) by striking ‘‘213.’’ and inserting ‘‘Sec. 
213.’’; 
(C) by striking ‘‘214.’’ and inserting ‘‘Sec. 
214.’’; 
(D) by striking ‘‘215.’’ and inserting ‘‘Sec. 
215.’’; and 
(E) by striking ‘‘216.’’ and inserting ‘‘Sec. 
216.’’. 
SEC. 1002. OTHER TRANSACTIONS AUTHORITY. 
Section 646 of the Department of Energy Organiza-
tion Act (42 U.S.C. 7256) is amended by adding at the 
end the following: 
‘‘(g)(1) In addition to other authorities granted to the 
Secretary under law, the Secretary may enter into other 
transactions on such terms as the Secretary may deem 
appropriate in furtherance of research, development, or 
demonstration functions vested in the Secretary. Such 
other transactions shall not be subject to the provisions 
of section 9 of the Federal Nonnuclear Energy Research 
and Development Act of 1974 (42 U.S.C. 5908) or section 
152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182). 
‘‘(2)(A) The Secretary shall ensure that— 
‘‘(i) to the maximum extent the Secretary de-
termines practicable, no transaction entered into 
under paragraph (1) provides for research, develop-
645 
ment, or demonstration that duplicates research, de-
velopment, or demonstration being conducted under 
existing projects carried out by the Department; 
‘‘(ii) to the extent the Secretary determines 
practicable, the funds provided by the Government 
under a transaction authorized by paragraph (1) do 
not exceed the total amount provided by other par-
ties to the transaction; and 
‘‘(iii) to the extent the Secretary determines 
practicable, competitive, merit-based selection proce-
dures shall be used when entering into transactions 
under paragraph (1). 
‘‘(B) A transaction authorized by paragraph (1) may 
be used for a research, development, or demonstration 
project only if the Secretary makes a written determina-
tion that the use of a standard contract, grant, or coopera-
tive agreement for the project is not feasible or appro-
priate. 
‘‘(3)(A) The Secretary shall protect from disclosure, 
including disclosure under section 552 of title 5, United 
States Code, for up to 5 years after the date the informa-
tion is received by the Secretary— 
‘‘(i) a proposal, proposal abstract, and sup-
porting documents submitted to the Department in 
a competitive or noncompetitive process having the
646 
potential for resulting in an award under paragraph 
(1) to the party submitting the information; and 
‘‘(ii) a business plan and technical information 
relating to a transaction authorized by paragraph 
(1) submitted to the Department as confidential 
business information. 
‘‘(B) The Secretary may protect from disclosure, for 
up to 5 years after the information was developed, any 
information developed pursuant to a transaction under 
paragraph (1) which developed information is of a char-
acter that it would be protected from disclosure under sec-
tion 552(b)(4) of title 5, United States Code, if obtained 
from a person other than a Federal agency. 
‘‘(4) Not later than 90 days after the date of enact-
ment of this subsection, the Secretary shall prescribe 
guidelines for using other transactions authorized by para-
graph (1). Such guidelines shall be published in the Fed-
eral Register for public comment under rulemaking proce-
dures of the Department. 
‘‘(5) The authority of the Secretary under this sub-
section may be delegated only to an officer of the Depart-
ment who is appointed by the President by and with the 
advice and consent of the Senate and may not be delegated 
to any other person.
647 
‘‘(6)(A) Not later than September 31, 2005, the 
Comptroller General of the United States shall report to 
Congress on the Department’s use of the authorities 
granted under this section, including the ability to attract 
nontraditional government contractors and whether addi-
tional safeguards are needed with respect to the use of 
such authorities. 
‘‘(B) In this section, the term ‘nontraditional Govern-
ment contractor’ has the same meaning as the term ‘non-
traditional defense contractor’ as defined in section 845(e) 
of the National Defense Authorization Act for Fiscal Year 
1994 (Public Law 103–160; 10 U.S.C. 2371 note).’’. 
TITLE XI—PERSONNEL AND 
TRAINING 
SEC. 1101. TRAINING GUIDELINES FOR ELECTRIC ENERGY 
INDUSTRY PERSONNEL. 
The Secretary of Energy, in consultation with the 
Secretary of Labor and jointly with the electric industry 
and recognized employee representatives, shall develop 
model personnel training guidelines to support electric sys-
tem reliability and safety. The training guidelines shall, 
at a minimum— 
(1) include training requirements for workers 
engaged in the construction, operation, inspection, 
and maintenance of electric generation, trans-
648 
mission, and distribution, including competency and 
certification requirements, and assessment require-
ments that include initial and ongoing evaluation of 
workers, recertification assessment procedures, and 
methods for examining or testing the qualification of 
individuals performing covered tasks; and 
(2) consolidate existing training guidelines on 
the construction, operation, maintenance, and in-
spection of electric generation, transmission, and 
distribution facilities, such as those established by 
the National Electric Safety Code and other indus-
try consensus standards. 
SEC. 1102. IMPROVED ACCESS TO ENERGY-RELATED SCI-
ENTIFIC AND TECHNICAL CAREERS. 
(a) DEPARTMENT OF ENERGY SCIENCE EDUCATION 
PROGRAMS.—Section 3164 of the Department of Energy 
Science Education Enhancement Act (42 U.S.C. 7381a) 
is amended by adding at the end the following: 
‘‘(c) PROGRAMS FOR STUDENTS FROM UNDERREP-
RESENTED GROUPS.—In carrying out a program under 
subsection (a), the Secretary shall give priority to activi-
ties that are designed to encourage students from under-
represented groups to pursue scientific and technical ca-
reers.’’.
649 
(b) PARTNERSHIPS WITH HISTORICALLY BLACK 
COLLEGES AND UNIVERSITIES, HISPANIC-SERVICING IN-
STITUTIONS, AND TRIBAL COLLEGES.—The Department 
of Energy Science Education Enhancement Act (42 
U.S.C. 7381 et seq.) is amended— 
(1) by redesignating sections 3167 and 3168 as 
sections 3168 and 3169, respectively; and 
(2) by inserting after section 3166 the fol-
lowing: 
‘‘SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK 
COLLEGES AND UNIVERSITIES, HISPANIC- 
SERVING INSTITUTIONS, AND TRIBAL COL-
LEGES. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) 
HISPANIC-SERVING
INSTITUTION.—The 
term ‘Hispanic-serving institution’ has the meaning 
given that term in section 502(a) of the Higher 
Education Act of 1965 (20 U.S.C. 1101a(a)). 
‘‘(2) HISTORICALLY BLACK COLLEGE OR UNI-
VERSITY.—The term ‘historically Black college or 
university’ has the meaning given the term ‘part B 
institution’ in section 322 of the Higher Education 
Act of 1965 (20 U.S.C. 1061).
650 
‘‘(3) NATIONAL LABORATORY.—The term ‘Na-
tional Laboratory’ has the meaning given that term 
in section 902 of the Energy Policy Act of 2003. 
‘‘(4) SCIENCE FACILITY.—The term ‘science fa-
cility’ has the meaning given the term ‘single-pur-
pose research facility’ in section 902 of the Energy 
Policy Act of 2003. 
‘‘(5) TRIBAL COLLEGE.—The term ‘tribal col-
lege’ has the meaning given the term ‘Tribal College 
or University’ in section 316(b)(3) of the Higher 
Education Act of 1965 (20 U.S.C. 1059c(b)(3)). 
‘‘(b) EDUCATION
PARTNERSHIP.—The Secretary 
shall direct the Director of each National Laboratory and, 
to the extent practicable, the head of any science facility 
to increase the participation of historically Black colleges 
or universities, Hispanic-serving institutions, or tribal col-
leges in activities that increase the capacity of the histori-
cally Black colleges or universities, Hispanic-serving insti-
tutions, or tribal colleges to train personnel in science or 
engineering. 
‘‘(c) ACTIVITIES.—An activity under subsection (b) 
may include— 
‘‘(1) collaborative research; 
‘‘(2) equipment transfer;
651 
‘‘(3) training activities conducted at a National 
Laboratory or science facility; and 
‘‘(4) mentoring activities conducted at a Na-
tional Laboratory or science facility. 
‘‘(d) REPORT.—Not later than 2 years after the date 
of enactment of the Energy Policy Act of 2003, the Sec-
retary shall submit to Congress a report on the activities 
carried out under this section.’’. 
SEC. 1103. NATIONAL POWER PLANT OPERATIONS TECH-
NOLOGY AND EDUCATION CENTER. 
(a) ESTABLISHMENT.—The Secretary shall support 
the establishment of a National Power Plant Operations 
Technology and Education Center (in this section referred 
to as the ‘‘Center’’), to address the need for training and 
educating certified operators for nonnuclear electric power 
generation plants. 
(b) ROLE.—The Center shall provide both training 
and continuing education relating to nonnuclear electric 
power generation plant technologies and operations. The 
Center shall conduct training and education activities on 
site and through Internet-based information technologies 
that allow for learning at remote sites. 
(c) CRITERIA FOR COMPETITIVE SELECTION.—The 
Secretary shall support the establishment of the Center 
at an institution of higher education with expertise in
652 
power plant technology and operation and with the ability 
to provide onsite as well as Internet-based training. 
SEC. 1104. INTERNATIONAL ENERGY TRAINING. 
(a) IN GENERAL.—The Secretary of Energy, in con-
sultation with the Secretaries of Commerce, Interior, and 
State and the Federal Energy Regulatory Commission, 
shall coordinate training and outreach efforts for inter-
national commercial energy markets in countries with de-
veloping and restructuring economies. 
(b) COMPONENTS.—The efforts may address— 
(1) production-related fiscal regimes; 
(2) grid and network issues; 
(3) energy user and demand side response; 
(4) international trade of energy; and 
(5) international transportation of energy. 
(c) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$1,500,000 for each of fiscal years 2004 through 2007. 
TITLE XII—ELECTRICITY 
SEC. 1201. SHORT TITLE. 
This title may be cited as the ‘‘Electric Reliability 
Act of 2004’’.
653 
Subtitle A—Reliability Standards 
SEC. 1211. ELECTRIC RELIABILITY STANDARDS. 
(a) IN GENERAL.—Part II of the Federal Power Act 
(16 U.S.C 824 et seq.) is amended by adding at the end 
the following: 
‘‘SEC. 215. ELECTRIC RELIABILITY. 
‘‘(a) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘bulk-power system’ means— 
‘‘(A) facilities and control systems nec-
essary for operating an interconnected electric 
energy transmission network (or any portion 
thereof); and 
‘‘(B) electric energy from generation facili-
ties needed to maintain transmission system re-
liability. 
The term does not include facilities used in the local 
distribution of electric energy. 
‘‘(2) The terms ‘Electric Reliability Organiza-
tion’ and ‘ERO’ mean the organization certified by 
the Commission under subsection (c) the purpose of 
which is to establish and enforce reliability stand-
ards for the bulk-power system, subject to Commis-
sion review. 
‘‘(3) The term ‘reliability standard’ means a re-
quirement, approved by the Commission under this
654 
section, to provide for reliable operation of the bulk- 
power system. The term includes requirements for 
the operation of existing bulk-power system facilities 
and the design of planned additions or modifications 
to such facilities to the extent necessary to provide 
for reliable operation of the bulk-power system, but 
the term does not include any requirement to en-
large such facilities or to construct new transmission 
capacity or generation capacity. 
‘‘(4) The term ‘reliable operation’ means oper-
ating the elements of the bulk-power system within 
equipment and electric system thermal, voltage, and 
stability limits so that instability, uncontrolled sepa-
ration, or cascading failures of such system will not 
occur as a result of a sudden disturbance or unan-
ticipated failure of system elements. 
‘‘(5) The term ‘Interconnection’ means a geo-
graphic area in which the operation of bulk-power 
system components is synchronized such that the 
failure of 1 or more of such components may ad-
versely affect the ability of the operators of other 
components within the system to maintain reliable 
operation of the facilities within their control. 
‘‘(6) The term ‘transmission organization’ 
means a Regional Transmission Organization, Inde-
655 
pendent System Operator, independent transmission 
provider, or other transmission organization finally 
approved by the Commission for the operation of 
transmission facilities. 
‘‘(7) The term ‘regional entity’ means an entity 
having enforcement authority pursuant to subsection 
(e)(4). 
‘‘(b) JURISDICTION AND APPLICABILITY.—(1) The 
Commission shall have jurisdiction, within the United 
States, over the ERO certified by the Commission under 
subsection (c), any regional entities, and all users, owners 
and operators of the bulk-power system, including but not 
limited to the entities described in section 201(f), for pur-
poses of approving reliability standards established under 
this section and enforcing compliance with this section. All 
users, owners and operators of the bulk-power system 
shall comply with reliability standards that take effect 
under this section. 
‘‘(2) The Commission shall issue a final rule to imple-
ment the requirements of this section not later than 180 
days after the date of enactment of this section. 
‘‘(c) CERTIFICATION.—Following the issuance of a 
Commission rule under subsection (b)(2), any person may 
submit an application to the Commission for certification 
as the Electric Reliability Organization. The Commission
656 
may certify 1 such ERO if the Commission determines 
that such ERO— 
‘‘(1) has the ability to develop and enforce, sub-
ject to subsection (e)(2), reliability standards that 
provide for an adequate level of reliability of the 
bulk-power system; and 
‘‘(2) has established rules that— 
‘‘(A) assure its independence of the users 
and owners and operators of the bulk-power 
system, while assuring fair stakeholder rep-
resentation in the selection of its directors and 
balanced decisionmaking in any ERO com-
mittee or subordinate organizational structure; 
‘‘(B) allocate equitably reasonable dues, 
fees, and other charges among end users for all 
activities under this section; 
‘‘(C) provide fair and impartial procedures 
for enforcement of reliability standards through 
the imposition of penalties in accordance with 
subsection (e) (including limitations on activi-
ties, functions, or operations, or other appro-
priate sanctions); 
‘‘(D) provide for reasonable notice and op-
portunity for public comment, due process, 
openness, and balance of interests in developing
657 
reliability standards and otherwise exercising its 
duties; and 
‘‘(E) provide for taking, after certification, 
appropriate steps to gain recognition in Canada 
and Mexico. 
‘‘(d) RELIABILITY STANDARDS.—(1) The Electric 
Reliability Organization shall file each reliability standard 
or modification to a reliability standard that it proposes 
to be made effective under this section with the Commis-
sion. 
‘‘(2) The Commission may approve, by rule or order, 
a proposed reliability standard or modification to a reli-
ability standard if it determines that the standard is just, 
reasonable, not unduly discriminatory or preferential, and 
in the public interest. The Commission shall give due 
weight to the technical expertise of the Electric Reliability 
Organization with respect to the content of a proposed 
standard or modification to a reliability standard and to 
the technical expertise of a regional entity organized on 
an Interconnection-wide basis with respect to a reliability 
standard to be applicable within that Interconnection, but 
shall not defer with respect to the effect of a standard 
on competition. A proposed standard or modification shall 
take effect upon approval by the Commission.
658 
‘‘(3) The Electric Reliability Organization shall 
rebuttably presume that a proposal from a regional entity 
organized on an Interconnection-wide basis for a reliability 
standard or modification to a reliability standard to be ap-
plicable on an Interconnection-wide basis is just, reason-
able, and not unduly discriminatory or preferential, and 
in the public interest. 
‘‘(4) The Commission shall remand to the Electric 
Reliability Organization for further consideration a pro-
posed reliability standard or a modification to a reliability 
standard that the Commission disapproves in whole or in 
part. 
‘‘(5) The Commission, upon its own motion or upon 
complaint, may order the Electric Reliability Organization 
to submit to the Commission a proposed reliability stand-
ard or a modification to a reliability standard that ad-
dresses a specific matter if the Commission considers such 
a new or modified reliability standard appropriate to carry 
out this section. 
‘‘(6) The final rule adopted under subsection (b)(2) 
shall include fair processes for the identification and time-
ly resolution of any conflict between a reliability standard 
and any function, rule, order, tariff, rate schedule, or 
agreement accepted, approved, or ordered by the Commis-
sion applicable to a transmission organization. Such trans-
659 
mission organization shall continue to comply with such 
function, rule, order, tariff, rate schedule or agreement ac-
cepted approved, or ordered by the Commission until— 
‘‘(A) the Commission finds a conflict exists be-
tween a reliability standard and any such provision; 
‘‘(B) the Commission orders a change to such 
provision pursuant to section 206 of this part; and 
‘‘(C) the ordered change becomes effective 
under this part. 
If the Commission determines that a reliability standard 
needs to be changed as a result of such a conflict, it shall 
order the ERO to develop and file with the Commission 
a modified reliability standard under paragraph (4) or (5) 
of this subsection. 
‘‘(e) ENFORCEMENT.—(1) The ERO may impose, 
subject to paragraph (2), a penalty on a user or owner 
or operator of the bulk-power system for a violation of a 
reliability standard approved by the Commission under 
subsection (d) if the ERO, after notice and an opportunity 
for a hearing— 
‘‘(A) finds that the user or owner or operator 
has violated a reliability standard approved by the 
Commission under subsection (d); and 
‘‘(B) files notice and the record of the pro-
ceeding with the Commission.
660 
‘‘(2) A penalty imposed under paragraph (1) may 
take effect not earlier than the 31st day after the ERO 
files with the Commission notice of the penalty and the 
record of proceedings. Such penalty shall be subject to re-
view by the Commission, on its own motion or upon appli-
cation by the user, owner or operator that is the subject 
of the penalty filed within 30 days after the date such 
notice is filed with the Commission. Application to the 
Commission for review, or the initiation of review by the 
Commission on its own motion, shall not operate as a stay 
of such penalty unless the Commission otherwise orders 
upon its own motion or upon application by the user, 
owner or operator that is the subject of such penalty. In 
any proceeding to review a penalty imposed under para-
graph (1), the Commission, after notice and opportunity 
for hearing (which hearing may consist solely of the record 
before the ERO and opportunity for the presentation of 
supporting reasons to affirm, modify, or set aside the pen-
alty), shall by order affirm, set aside, reinstate, or modify 
the penalty, and, if appropriate, remand to the ERO for 
further proceedings. The Commission shall implement ex-
pedited procedures for such hearings. 
‘‘(3) On its own motion or upon complaint, the Com-
mission may order compliance with a reliability standard 
and may impose a penalty against a user or owner or oper-
661 
ator of the bulk-power system if the Commission finds, 
after notice and opportunity for a hearing, that the user 
or owner or operator of the bulk-power system has en-
gaged or is about to engage in any acts or practices that 
constitute or will constitute a violation of a reliability 
standard. 
‘‘(4) The Commission shall issue regulations author-
izing the ERO to enter into an agreement to delegate au-
thority to a regional entity for the purpose of proposing 
reliability standards to the ERO and enforcing reliability 
standards under paragraph (1) if— 
‘‘(A) the regional entity is governed by— 
‘‘(i) an independent board; 
‘‘(ii) a balanced stakeholder board; or 
‘‘(iii) a combination independent and bal-
anced stakeholder board. 
‘‘(B) the regional entity otherwise satisfies the 
provisions of subsection (c)(1) and (2); and 
‘‘(C) the agreement promotes effective and effi-
cient administration of bulk-power system reliability. 
The Commission may modify such delegation. The ERO 
and the Commission shall rebuttably presume that a pro-
posal for delegation to a regional entity organized on an 
Interconnection-wide basis promotes effective and efficient 
administration of bulk-power system reliability and should
662 
be approved. Such regulation may provide that the Com-
mission may assign the ERO’s authority to enforce reli-
ability standards under paragraph (1) directly to a re-
gional entity consistent with the requirements of this para-
graph. 
‘‘(5) The Commission may take such action as is nec-
essary or appropriate against the ERO or a regional entity 
to ensure compliance with a reliability standard or any 
Commission order affecting the ERO or a regional entity. 
‘‘(6) Any penalty imposed under this section shall 
bear a reasonable relation to the seriousness of the viola-
tion and shall take into consideration the efforts of such 
user, owner, or operator to remedy the violation in a time-
ly manner. 
‘‘(f) CHANGES IN ELECTRIC RELIABILITY ORGANIZA-
TION RULES.—The Electric Reliability Organization shall 
file with the Commission for approval any proposed rule 
or proposed rule change, accompanied by an explanation 
of its basis and purpose. The Commission, upon its own 
motion or complaint, may propose a change to the rules 
of the ERO. A proposed rule or proposed rule change shall 
take effect upon a finding by the Commission, after notice 
and opportunity for comment, that the change is just, rea-
sonable, not unduly discriminatory or preferential, is in
663 
the public interest, and satisfies the requirements of sub-
section (c). 
‘‘(g) RELIABILITY REPORTS.—The ERO shall con-
duct periodic assessments of the reliability and adequacy 
of the bulk-power system in North America. 
‘‘(h) COORDINATION WITH CANADA AND MEXICO.— 
The President is urged to negotiate international agree-
ments with the governments of Canada and Mexico to pro-
vide for effective compliance with reliability standards and 
the effectiveness of the ERO in the United States and 
Canada or Mexico. 
‘‘(i) SAVINGS PROVISIONS.—(1) The ERO shall have 
authority to develop and enforce compliance with reli-
ability standards for only the bulk-power system. 
‘‘(2) This section does not authorize the ERO or the 
Commission to order the construction of additional gen-
eration or transmission capacity or to set and enforce com-
pliance with standards for adequacy or safety of electric 
facilities or services. 
‘‘(3) Nothing in this section shall be construed to pre-
empt any authority of any State to take action to ensure 
the safety, adequacy, and reliability of electric service 
within that State, as long as such action is not incon-
sistent with any reliability standard.
664 
‘‘(4) Within 90 days of the application of the Electric 
Reliability Organization or other affected party, and after 
notice and opportunity for comment, the Commission shall 
issue a final order determining whether a State action is 
inconsistent with a reliability standard, taking into consid-
eration any recommendation of the ERO. 
‘‘(5) The Commission, after consultation with the 
ERO and the State taking action, may stay the effective-
ness of any State action, pending the Commission’s 
issuance of a final order. 
‘‘(j) REGIONAL ADVISORY BODIES.—The Commis-
sion shall establish a regional advisory body on the petition 
of at least 2⁄3 of the States within a region that have more 
than 1⁄2 of their electric load served within the region. A 
regional advisory body shall be composed of 1 member 
from each participating State in the region, appointed by 
the Governor of each State, and may include representa-
tives of agencies, States, and provinces outside the United 
States. A regional advisory body may provide advice to the 
Electric Reliability Organization, a regional entity, or the 
Commission regarding the governance of an existing or 
proposed regional entity within the same region, whether 
a standard proposed to apply within the region is just, 
reasonable, not unduly discriminatory or preferential, and 
in the public interest, whether fees proposed to be assessed
665 
within the region are just, reasonable, not unduly discrimi-
natory or preferential, and in the public interest and any 
other responsibilities requested by the Commission. The 
Commission may give deference to the advice of any such 
regional advisory body if that body is organized on an 
Interconnection-wide basis. 
‘‘(k) ALASKA AND HAWAII.—The provisions of this 
section do not apply to Alaska or Hawaii.’’. 
(b) STATUS OF ERO.—The Electric Reliability Orga-
nization certified by the Federal Energy Regulatory Com-
mission under section 215(c) of the Federal Power Act 
and any regional entity delegated enforcement authority 
pursuant to section 215(e)(4) of that Act are not depart-
ments, agencies, or instrumentalities of the United States 
Government. 
Subtitle B—Transmission 
Infrastructure Modernization 
SEC. 1221. SITING OF INTERSTATE ELECTRIC 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:
666 
‘‘SEC. 216. SITING OF INTERSTATE ELECTRIC TRANS-
MISSION FACILITIES. 
‘‘(a) DESIGNATION OF NATIONAL INTEREST ELEC-
TRIC TRANSMISSION CORRIDORS.— 
‘‘(1) TRANSMISSION
CONGESTION
STUDY.— 
Within 1 year after the enactment of this section, 
and every 3 years thereafter, the Secretary of En-
ergy, in consultation with affected States, shall con-
duct a study of electric transmission congestion. 
After considering alternatives and recommendations 
from interested parties, including an opportunity for 
comment from affected States, the Secretary shall 
issue a report, based on such study, which may des-
ignate any geographic area experiencing electric en-
ergy transmission capacity constraints or congestion 
that adversely affects consumers as a national inter-
est electric transmission corridor. The Secretary 
shall conduct the study and issue the report in con-
sultation with any appropriate regional entity ref-
erenced in section 215 of this Act. 
‘‘(2) CONSIDERATIONS.—In determining wheth-
er to designate a national interest electric trans-
mission corridor referred to in paragraph (1) under 
this section, the Secretary may consider whether— 
‘‘(A) the economic vitality and development 
of the corridor, or the end markets served by
667 
the corridor, may be constrained by lack of ade-
quate or reasonably priced electricity; 
‘‘(B)(i) economic growth in the corridor, or 
the end markets served by the corridor, may be 
jeopardized by reliance on limited sources of en-
ergy; and 
‘‘(ii) a diversification of supply is war-
ranted; 
‘‘(C) the energy independence of the 
United States would be served by the designa-
tion; 
‘‘(D) the designation would be in the inter-
est of national energy policy; and 
‘‘(E) the designation would enhance na-
tional defense and homeland security. 
‘‘(b) CONSTRUCTION PERMIT.—Except as provided 
in subsection (i), the Commission is authorized, after no-
tice and an opportunity for hearing, to issue a permit or 
permits for the construction or modification of electric 
transmission facilities in a national interest electric trans-
mission corridor designated by the Secretary under sub-
section (a) if the Commission finds that— 
‘‘(1)(A) a State in which the transmission fa-
cilities are to be constructed or modified is without 
authority to—
668 
‘‘(i) approve the siting of the facilities; or 
‘‘(ii) consider the interstate benefits ex-
pected to be achieved by the proposed construc-
tion or modification of transmission facilities in 
the State; 
‘‘(B) the applicant for a permit is a transmit-
ting utility under this Act but does not qualify to 
apply for a permit or siting approval for the pro-
posed project in a State because the applicant does 
not serve end-use customers in the State; or 
‘‘(C) a State commission or other entity that 
has authority to approve the siting of the facilities 
has— 
‘‘(i) withheld approval for more than 1 
year after the filing of an application pursuant 
to applicable law seeking approval or 1 year 
after the designation of the relevant national in-
terest electric transmission corridor, whichever 
is later; or 
‘‘(ii) conditioned its approval in such a 
manner that the proposed construction or modi-
fication will not significantly reduce trans-
mission congestion in interstate commerce or is 
not economically feasible;
669 
‘‘(2) the facilities to be authorized by the per-
mit will be used for the transmission of electric en-
ergy in interstate commerce; 
‘‘(3) the proposed construction or modification 
is consistent with the public interest; 
‘‘(4) the proposed construction or modification 
will significantly reduce transmission congestion in 
interstate commerce and protects or benefits con-
sumers; and 
‘‘(5) the proposed construction or modification 
is consistent with sound national energy policy and 
will enhance energy independence. 
‘‘(c) PERMIT APPLICATIONS.—Permit applications 
under subsection (b) shall be made in writing to the Com-
mission. The Commission shall issue rules setting forth 
the form of the application, the information to be con-
tained in the application, and the manner of service of no-
tice of the permit application upon interested persons. 
‘‘(d) COMMENTS.—In any proceeding before the 
Commission under subsection (b), the Commission shall 
afford each State in which a transmission facility covered 
by the permit is or will be located, each affected Federal 
agency and Indian tribe, private property owners, and 
other interested persons, a reasonable opportunity to
670 
present their views and recommendations with respect to 
the need for and impact of a facility covered by the permit. 
‘‘(e) RIGHTS-OF-WAY.—In the case of a permit under 
subsection (b) for electric transmission facilities to be lo-
cated on property other than property owned by the 
United States or a State, if the permit holder cannot ac-
quire by contract, or is unable to agree with the owner 
of the property to the compensation to be paid for, the 
necessary right-of-way to construct or modify such trans-
mission facilities, the permit holder may acquire the right- 
of-way by the exercise of the right of eminent domain in 
the district court of the United States for the district in 
which the property concerned is located, or in the appro-
priate court of the State in which the property is located. 
The practice and procedure in any action or proceeding 
for that purpose in the district court of the United States 
shall conform as nearly as may be with the practice and 
procedure in similar action or proceeding in the courts of 
the State where the property is situated. 
‘‘(f) STATE LAW.—Nothing in this section shall pre-
clude any person from constructing or modifying any 
transmission facility pursuant to State law. 
‘‘(g) COMPENSATION.—Any exercise of eminent do-
main authority pursuant to this section shall be considered 
a taking of private property for which just compensation
671 
is due. Just compensation shall be an amount equal to 
the full fair market value of the property taken on the 
date of the exercise of eminent domain authority, except 
that the compensation shall exceed fair market value if 
necessary to make the landowner whole for decreases in 
the value of any portion of the land not subject to eminent 
domain. Any parcel of land acquired by eminent domain 
under this subsection shall be transferred back to the 
owner from whom it was acquired (or his heirs or assigns) 
if the land is not used for the construction or modification 
of electric transmission facilities within a reasonable pe-
riod of time after the acquisition. Other than construction, 
modification, operation, or maintenance of electric trans-
mission facilities and related facilities, property acquired 
under subsection (e) may not be used for any purpose (in-
cluding use for any heritage area, recreational trail, or 
park) without the consent of the owner of the parcel from 
whom the property was acquired (or the owner’s heirs or 
assigns). 
‘‘(h) COORDINATION OF FEDERAL AUTHORIZATIONS 
FOR TRANSMISSION AND DISTRIBUTION FACILITIES.— 
‘‘(1) LEAD AGENCY.—If an applicant, or pro-
spective applicant, for a Federal authorization re-
lated to an electric transmission or distribution facil-
ity so requests, the Department of Energy (DOE)
672 
shall act as the lead agency for purposes of coordi-
nating all applicable Federal authorizations and re-
lated environmental reviews of the facility. For pur-
poses of this subsection, the term ‘Federal author-
ization’ means any authorization required under 
Federal law in order to site a transmission or dis-
tribution facility, including but not limited to such 
permits, special use authorizations, certifications, 
opinions, or other approvals as may be required, 
whether issued by a Federal or a State agency. To 
the maximum extent practicable under applicable 
Federal law, the Secretary of Energy shall coordi-
nate this Federal authorization and review process 
with any Indian tribes, multi-State entities, and 
State agencies that are responsible for conducting 
any separate permitting and environmental reviews 
of the facility, to ensure timely and efficient review 
and permit decisions. 
‘‘(2) AUTHORITY TO SET DEADLINES.—As lead 
agency, the Department of Energy, in consultation 
with agencies responsible for Federal authorizations 
and, as appropriate, with Indian tribes, multi-State 
entities, and State agencies that are willing to co-
ordinate their own separate permitting and environ-
mental reviews with the Federal authorization and
673 
environmental reviews, shall establish prompt and 
binding intermediate milestones and ultimate dead-
lines for the review of, and Federal authorization de-
cisions relating to, the proposed facility. The Sec-
retary of Energy shall ensure that once an applica-
tion has been submitted with such data as the Sec-
retary considers necessary, all permit decisions and 
related environmental reviews under all applicable 
Federal laws shall be completed within 1 year or, if 
a requirement of another provision of Federal law 
makes this impossible, as soon thereafter as is prac-
ticable. The Secretary of Energy also shall provide 
an expeditious pre-application mechanism for pro-
spective applicants to confer with the agencies in-
volved to have each such agency determine and com-
municate to the prospective applicant within 60 days 
of when the prospective applicant submits a request 
for such information concerning— 
‘‘(A) the likelihood of approval for a poten-
tial facility; and 
‘‘(B) key issues of concern to the agencies 
and public. 
‘‘(3) CONSOLIDATED ENVIRONMENTAL REVIEW 
AND RECORD OF DECISION.—As lead agency head, 
the Secretary of Energy, in consultation with the af-
674 
fected agencies, shall prepare a single environmental 
review document, which shall be used as the basis 
for all decisions on the proposed project under Fed-
eral law. The document may be an environmental as-
sessment or environmental impact statement under 
the National Environmental Policy Act of 1969 if 
warranted, or such other form of analysis as may be 
warranted. The Secretary of Energy and the heads 
of other agencies shall streamline the review and 
permitting of transmission and distribution facilities 
within corridors designated under section 503 of the 
Federal Land Policy and Management Act (43 
U.S.C. 1763) by fully taking into account prior anal-
yses and decisions relating to the corridors. Such 
document shall include consideration by the relevant 
agencies of any applicable criteria or other matters 
as required under applicable laws. 
‘‘(4) APPEALS.—In the event that any agency 
has denied a Federal authorization required for a 
transmission or distribution facility, or has failed to 
act by the deadline established by the Secretary pur-
suant to this section for deciding whether to issue 
the authorization, the applicant or any State in 
which the facility would be located may file an ap-
peal with the Secretary, who shall, in consultation
675 
with the affected agency, review the denial or take 
action on the pending application. Based on the 
overall record and in consultation with the affected 
agency, the Secretary may then either issue the nec-
essary authorization with any appropriate condi-
tions, or deny the application. The Secretary shall 
issue a decision within 90 days of the filing of the 
appeal. In making a decision under this paragraph, 
the Secretary shall comply with applicable require-
ments of Federal law, including any requirements of 
the Endangered Species Act, the Clean Water Act, 
the National Forest Management Act, the National 
Environmental Policy Act of 1969, and the Federal 
Land Policy and Management Act. 
‘‘(5) CONFORMING REGULATIONS AND MEMO-
RANDA
OF
UNDERSTANDING.—Not later than 18 
months after the date of enactment of this section, 
the Secretary of Energy shall issue any regulations 
necessary to implement this subsection. Not later 
than 1 year after the date of enactment of this sec-
tion, the Secretary and the heads of all Federal 
agencies with authority to issue Federal authoriza-
tions shall enter into Memoranda of Understanding 
to ensure the timely and coordinated review and per-
mitting of electricity transmission and distribution
676 
facilities. The head of each Federal agency with au-
thority to issue a Federal authorization shall des-
ignate a senior official responsible for, and dedicate 
sufficient other staff and resources to ensure, full 
implementation of the DOE regulations and any 
Memoranda. Interested Indian tribes, multi-State 
entities, and State agencies may enter such Memo-
randa of Understanding. 
‘‘(6) DURATION AND RENEWAL.—Each Federal 
land use authorization for an electricity transmission 
or distribution facility shall be issued— 
‘‘(A) for a duration, as determined by the 
Secretary of Energy, commensurate with the 
anticipated use of the facility, and 
‘‘(B) with appropriate authority to manage 
the right-of-way for reliability and environ-
mental protection. 
Upon the expiration of any such authorization (in-
cluding an authorization issued prior to enactment 
of this section), the authorization shall be reviewed 
for renewal taking fully into account reliance on 
such electricity infrastructure, recognizing its impor-
tance for public health, safety and economic welfare 
and as a legitimate use of Federal lands.
677 
‘‘(7) MAINTAINING
AND
ENHANCING
THE 
TRANSMISSION INFRASTRUCTURE.—In exercising the 
responsibilities under this section, the Secretary of 
Energy shall consult regularly with the Federal En-
ergy Regulatory Commission (FERC), FERC-ap-
proved electric reliability organizations (including re-
lated regional entities), and FERC-approved Re-
gional Transmission Organizations and Independent 
System Operators. 
‘‘(i) INTERSTATE COMPACTS.—The consent of Con-
gress is hereby given for 3 or more contiguous States to 
enter into an interstate compact, subject to approval by 
Congress, establishing regional transmission siting agen-
cies to facilitate siting of future electric energy trans-
mission facilities within such States and to carry out the 
electric energy transmission siting responsibilities of such 
States. The Secretary of Energy may provide technical as-
sistance to regional transmission siting agencies estab-
lished under this subsection. Such regional transmission 
siting agencies shall have the authority to review, certify, 
and permit siting of transmission facilities, including fa-
cilities in national interest electric transmission corridors 
(other than facilities on property owned by the United 
States). The Commission shall have no authority to issue 
a permit for the construction or modification of electric
678 
transmission facilities within a State that is a party to 
a compact, unless the members of a compact are in dis-
agreement and the Secretary makes, after notice and an 
opportunity for a hearing, the finding described in section 
(b)(1)(C). 
‘‘(j) SAVINGS CLAUSE.—Nothing in this section shall 
be construed to affect any requirement of the environ-
mental laws of the United States, including, but not lim-
ited to, the National Environmental Policy Act of 1969. 
Subsection (h)(4) of this section shall not apply to any 
Congressionally-designated components of the National 
Wilderness Preservation System, the National Wild and 
Scenic Rivers System, or the National Park system (in-
cluding National Monuments therein). 
‘‘(k) ERCOT.—This section shall not apply within 
the area referred to in section 212(k)(2)(A).’’. 
(b) REPORTS
TO CONGRESS
ON CORRIDORS
AND 
RIGHTS OF WAY ON FEDERAL LANDS.—The Secretary of 
the Interior, the Secretary of Energy, the Secretary of Ag-
riculture, and the Chairman of the Council on Environ-
mental Quality shall, within 90 days of the date of enact-
ment of this subsection, submit a joint report to Congress 
identifying each of the following: 
(1) All existing designated transmission and 
distribution corridors on Federal land and the status
679 
of work related to proposed transmission and dis-
tribution corridor designations under Title V of the 
Federal Land Policy and Management Act (43 
U.S.C. 1761 et. Seq.), the schedule for completing 
such work, any impediments to completing the work, 
and steps that Congress could take to expedite the 
process. 
(2) The number of pending applications to lo-
cate transmission and distribution facilities on Fed-
eral lands, key information relating to each such fa-
cility, how long each application has been pending, 
the schedule for issuing a timely decision as to each 
facility, and progress in incorporating existing and 
new such rights-of-way into relevant land use and 
resource management plans or their equivalent. 
(3) The number of existing transmission and 
distribution rights-of-way on Federal lands that will 
come up for renewal within the following 5, 10, and 
15 year periods, and a description of how the Secre-
taries plan to manage such renewals. 
SEC. 1222. THIRD-PARTY FINANCE. 
(a) EXISTING FACILITIES.—The Secretary of Energy 
(hereinafter in this section referred to as the ‘‘Secretary’’), 
acting through the Administrator of the Western Area 
Power Administration (hereinafter in this section referred
680 
to as ‘‘WAPA’’), or through the Administrator of the 
Southwestern Power Administration (hereinafter in this 
section referred to as ‘‘SWPA’’), or both, may design, de-
velop, construct, operate, maintain, or own, or participate 
with other entities in designing, developing, constructing, 
operating, maintaining, or owning, an electric power 
transmission facility and related facilities (‘‘Project’’) 
needed to upgrade existing transmission facilities owned 
by SWPA or WAPA if the Secretary of Energy, in con-
sultation with the applicable Administrator, determines 
that the proposed Project— 
(1)(A) is located in a national interest electric 
transmission corridor designated under section 
216(a) of the Federal Power Act and will reduce 
congestion of electric transmission in interstate com-
merce; or 
(B) is necessary to accommodate an actual or 
projected increase in demand for electric trans-
mission capacity; 
(2) is consistent with— 
(A) transmission needs identified, in a 
transmission expansion plan or otherwise, by 
the appropriate Regional Transmission Organi-
zation or Independent System Operator (as de-
681 
fined in the Federal Power Act), if any, or ap-
proved regional reliability organization; and 
(B) efficient and reliable operation of the 
transmission grid; and 
(3) would be operated in conformance with pru-
dent utility practice. 
(b) 
NEW
FACILITIES.—The 
Secretary, 
acting 
through WAPA or SWPA, or both, may design, develop, 
construct, operate, maintain, or own, or participate with 
other entities in designing, developing, constructing, oper-
ating, maintaining, or owning, a new electric power trans-
mission facility and related facilities (‘‘Project’’) located 
within any State in which WAPA or SWPA operates if 
the Secretary, in consultation with the applicable Adminis-
trator, determines that the proposed Project— 
(1)(A) is located in an area designated under 
section 216(a) of the Federal Power Act and will re-
duce congestion of electric transmission in interstate 
commerce; or 
(B) is necessary to accommodate an actual or 
projected increase in demand for electric trans-
mission capacity; 
(2) is consistent with— 
(A) transmission needs identified, in a 
transmission expansion plan or otherwise, by
682 
the appropriate Regional Transmission Organi-
zation or Independent System Operator, if any, 
or approved regional reliability organization; 
and 
(B) efficient and reliable operation of the 
transmission grid; 
(3) will be operated in conformance with pru-
dent utility practice; 
(4) will be operated by, or in conformance with 
the rules of, the appropriate (A) Regional Trans-
mission Organization or Independent System Oper-
ator, if any, or (B) if such an organization does not 
exist, regional reliability organization; and 
(5) will not duplicate the functions of existing 
transmission facilities or proposed facilities which 
are the subject of ongoing or approved siting and re-
lated permitting proceedings. 
(c) OTHER FUNDS.— 
(1) IN GENERAL.—In carrying out a Project 
under subsection (a) or (b), the Secretary may ac-
cept and use funds contributed by another entity for 
the purpose of carrying out the Project. 
(2) AVAILABILITY.—The contributed funds 
shall be available for expenditure for the purpose of 
carrying out the Project—
683 
(A) without fiscal year limitation; and 
(B) as if the funds had been appropriated 
specifically for that Project. 
(3) ALLOCATION OF COSTS.—In carrying out a 
Project under subsection (a) or (b), any costs of the 
Project not paid for by contributions from another 
entity shall be collected through rates charged to 
customers using the new transmission capability pro-
vided by the Project and allocated equitably among 
these project beneficiaries using the new trans-
mission capability. 
(d) RELATIONSHIP TO OTHER LAWS.—Nothing in 
this section affects any requirement of— 
(1) any Federal environmental law, including 
the National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.); 
(2) any Federal or State law relating to the 
siting of energy facilities; or 
(3) any existing authorizing statutes. 
(e) SAVINGS CLAUSE.—Nothing in this section shall 
constrain or restrict an Administrator in the utilization 
of other authority delegated to the Administrator of 
WAPA or SWPA. 
(f) SECRETARIAL
DETERMINATIONS.—Any deter-
mination made pursuant to subsections (a) or (b) shall
684 
be based on findings by the Secretary using the best avail-
able data. 
(g) MAXIMUM FUNDING AMOUNT.—The Secretary 
shall not accept and use more than $100,000,000 under 
subsection (c)(1) for the period encompassing fiscal years 
2004 through 2013. 
SEC. 1223. TRANSMISSION SYSTEM MONITORING. 
Within 6 months after the date of enactment of this 
Act, the Secretary of Energy and the Federal Energy Reg-
ulatory Commission shall study and report to Congress on 
the steps which must be taken to establish a system to 
make available to all transmission system owners and Re-
gional Transmission Organizations (as defined in the Fed-
eral Power Act) within the Eastern and Western Inter-
connections real-time information on the functional status 
of all transmission lines within such Interconnections. In 
such study, the Commission shall assess technical means 
for implementing such transmission information system 
and identify the steps the Commission or Congress must 
take to require the implementation of such system. 
SEC. 1224. ADVANCED TRANSMISSION TECHNOLOGIES. 
(a) AUTHORITY.—The Federal Energy Regulatory 
Commission, in the exercise of its authorities under the 
Federal Power Act and the Public Utility Regulatory Poli-
685 
cies Act of 1978, shall encourage the deployment of ad-
vanced transmission technologies. 
(b) DEFINITION.—For the purposes of this section, 
the term ‘‘advanced transmission technologies’’ means 
technologies that increase the capacity, efficiency, or reli-
ability of existing or new transmission facilities, including, 
but not limited to— 
(1) high-temperature lines (including super-
conducting cables); 
(2) underground cables; 
(3) advanced conductor technology (including 
advanced composite conductors, high-temperature 
low-sag conductors, and fiber optic temperature 
sensing conductors); 
(4) high-capacity ceramic electric wire, connec-
tors, and insulators; 
(5) optimized transmission line configurations 
(including multiple phased transmission lines); 
(6) modular equipment; 
(7) wireless power transmission; 
(8) ultra-high voltage lines; 
(9) high-voltage DC technology; 
(10) flexible AC transmission systems;
686 
(11) energy storage devices (including pumped 
hydro, compressed air, superconducting magnetic en-
ergy storage, flywheels, and batteries); 
(12) controllable load; 
(13) distributed generation (including PV, fuel 
cells, microturbines); 
(14) enhanced power device monitoring; 
(15) direct system state sensors; 
(16) fiber optic technologies; 
(17) power electronics and related software (in-
cluding real time monitoring and analytical soft-
ware); and 
(18) any other technologies the Commission 
considers appropriate. 
(c) 
OBSOLETE
OR
IMPRACTICABLE
TECH-
NOLOGIES.—The Commission is authorized to cease en-
couraging the deployment of any technology described in 
this section on a finding that such technology has been 
rendered obsolete or otherwise impracticable to deploy. 
SEC. 1225. ELECTRIC TRANSMISSION AND DISTRIBUTION 
PROGRAMS. 
(a) ELECTRIC TRANSMISSION
AND DISTRIBUTION 
PROGRAM.—The Secretary of Energy (hereinafter in this 
section referred to as the ‘‘Secretary’’) acting through the 
Director of the Office of Electric Transmission and Dis-
687 
tribution shall establish a comprehensive research, devel-
opment, demonstration and commercial application pro-
gram to promote improved reliability and efficiency of 
electrical transmission and distribution systems. This pro-
gram shall include— 
(1) advanced energy delivery and storage tech-
nologies, materials, and systems, including new 
transmission technologies, such as flexible alter-
nating current transmission systems, composite con-
ductor materials and other technologies that enhance 
reliability, operational flexibility, or power-carrying 
capability; 
(2) advanced grid reliability and efficiency tech-
nology development; 
(3) technologies contributing to significant load 
reductions; 
(4) advanced metering, load management, and 
control technologies; 
(5) technologies to enhance existing grid compo-
nents; 
(6) the development and use of high-tempera-
ture superconductors to— 
(A) enhance the reliability, operational 
flexibility, or power-carrying capability of elec-
tric transmission or distribution systems; or
688 
(B) increase the efficiency of electric en-
ergy generation, transmission, distribution, or 
storage systems; 
(7) integration of power systems, including sys-
tems to deliver high-quality electric power, electric 
power reliability, and combined heat and power; 
(8) supply of electricity to the power grid by 
small scale, distributed and residential-based power 
generators; 
(9) the development and use of advanced grid 
design, operation and planning tools; 
(10) any other infrastructure technologies, as 
appropriate; and 
(11) technology transfer and education. 
(b) PROGRAM PLAN.—Not later than 1 year after the 
date of the enactment of this legislation, the Secretary, 
in consultation with other appropriate Federal agencies, 
shall prepare and transmit to Congress a 5-year program 
plan to guide activities under this section. In preparing 
the program plan, the Secretary may consult with utilities, 
energy services providers, manufacturers, institutions of 
higher education, other appropriate State and local agen-
cies, environmental organizations, professional and tech-
nical societies, and any other persons the Secretary con-
siders appropriate.
689 
(c) IMPLEMENTATION.—The Secretary shall consider 
implementing this program using a consortium of indus-
try, university and national laboratory participants. 
(d) REPORT.—Not later than 2 years after the trans-
mittal of the plan under subsection (b), the Secretary shall 
transmit a report to Congress describing the progress 
made under this section and identifying any additional re-
sources needed to continue the development and commer-
cial application of transmission and distribution infra-
structure technologies. 
(e) POWER DELIVERY RESEARCH INITIATIVE.— 
(1) IN GENERAL.—The Secretary shall establish 
a research, development, demonstration, and com-
mercial application initiative specifically focused on 
power delivery utilizing components incorporating 
high temperature superconductivity. 
(2) GOALS.—The goals of this initiative shall be 
to— 
(A) establish facilities to develop high tem-
perature superconductivity power applications 
in partnership with manufacturers and utilities; 
(B) provide technical leadership for estab-
lishing reliability for high temperature super-
conductivity power applications including suit-
able modeling and analysis;
690 
(C) facilitate commercial transition toward 
direct current power transmission, storage, and 
use for high power systems utilizing high tem-
perature superconductivity; and 
(D) facilitate the integration of very low 
impedance high temperature superconducting 
wires and cables in existing electric networks to 
improve system performance, power flow control 
and reliability. 
(3) REQUIREMENTS.—The initiative shall in-
clude— 
(A) feasibility analysis, planning, research, 
and design to construct demonstrations of 
superconducting links in high power, direct cur-
rent and controllable alternating current trans-
mission systems; 
(B) public-private partnerships to dem-
onstrate deployment of high temperature super-
conducting cable into testbeds simulating a re-
alistic transmission grid and under varying 
transmission conditions, including actual grid 
insertions; and 
(C) testbeds developed in cooperation with 
national laboratories, industries, and univer-
sities to demonstrate these technologies, pre-
691 
pare the technologies for commercial introduc-
tion, and address cost or performance road-
blocks to successful commercial use. 
(4) AUTHORIZATION OF APPROPRIATIONS.—For 
purposes of carrying out this subsection, there are 
authorized to be appropriated— 
(A) for fiscal year 2004, $15,000,000; 
(B) for fiscal year 2005, $20,000,000; 
(C) for fiscal year 2006, $30,000,000; 
(D) for fiscal year 2007, $35,000,000; and 
(E) for fiscal year 2008, $40,000,000. 
SEC. 1226. ADVANCED POWER SYSTEM TECHNOLOGY IN-
CENTIVE PROGRAM. 
(a) PROGRAM.—The Secretary of Energy is author-
ized to establish an Advanced Power System Technology 
Incentive Program to support the deployment of certain 
advanced power system technologies and to improve and 
protect certain critical governmental, industrial, and com-
mercial processes. Funds provided under this section shall 
be used by the Secretary to make incentive payments to 
eligible owners or operators of advanced power system 
technologies to increase power generation through en-
hanced operational, economic, and environmental perform-
ance. Payments under this section may only be made upon
692 
receipt by the Secretary of an incentive payment applica-
tion establishing an applicant as either— 
(1) a qualifying advanced power system tech-
nology facility; or 
(2) a qualifying security and assured power fa-
cility. 
(b) INCENTIVES.—Subject to availability of funds, a 
payment of 1.8 cents per kilowatt-hour shall be paid to 
the owner or operator of a qualifying advanced power sys-
tem technology facility under this section for electricity 
generated at such facility. An additional 0.7 cents per kilo-
watt-hour shall be paid to the owner or operator of a quali-
fying security and assured power facility for electricity 
generated at such facility. Any facility qualifying under 
this section shall be eligible for an incentive payment for 
up to, but not more than, the first 10,000,000 kilowatt- 
hours produced in any fiscal year. 
(c) ELIGIBILITY.—For purposes of this section: 
(1) QUALIFYING
ADVANCED
POWER
SYSTEM 
TECHNOLOGY FACILITY.—The term ‘‘qualifying ad-
vanced power system technology facility’’ means a 
facility using an advanced fuel cell, turbine, or hy-
brid power system or power storage system to gen-
erate or store electric energy.
693 
(2) QUALIFYING
SECURITY
AND
ASSURED 
POWER
FACILITY.—The term ‘‘qualifying security 
and assured power facility’’ means a qualifying ad-
vanced power system technology facility determined 
by the Secretary of Energy, in consultation with the 
Secretary of Homeland Security, to be in critical 
need of secure, reliable, rapidly available, high-qual-
ity power for critical governmental, industrial, or 
commercial applications. 
(d) AUTHORIZATION.—There are authorized to be ap-
propriated to the Secretary of Energy for the purposes 
of this section, $10,000,000 for each of the fiscal years 
2004 through 2010. 
SEC. 1227. OFFICE OF ELECTRIC TRANSMISSION AND DIS-
TRIBUTION. 
(a) CREATION OF AN OFFICE OF ELECTRIC TRANS-
MISSION AND DISTRIBUTION.—Title II of the Department 
of Energy Organization Act (42 U.S.C. 7131 et seq.) (as 
amended by section 502(a) of this Act) is amended by in-
serting the following after section 217, as added by title 
V of this Act: 
‘‘SEC. 218. OFFICE OF ELECTRIC TRANSMISSION AND DIS-
TRIBUTION. 
‘‘(a) ESTABLISHMENT.—There is established within 
the Department an Office of Electric Transmission and
694 
Distribution. This Office shall be headed by a Director, 
subject to the authority of the Secretary. The Director 
shall be appointed by the Secretary. The Director shall 
be compensated 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 elec-
tricity 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.’’.
695 
(b) CONFORMING AMENDMENTS.—(1) The table of 
contents of the Department of Energy Organization Act 
(42 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 fol-
lowing 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
696 
‘‘(2) on terms and conditions (not relating to 
rates) that are comparable to those under which 
such unregulated transmitting utility provides trans-
mission services to itself and that are not unduly 
discriminatory or preferential. 
‘‘(b) EXEMPTION.—The Commission shall exempt 
from any rule or order under this section any unregulated 
transmitting 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 
thereof); or 
‘‘(3) meets other criteria the Commission deter-
mines to be in the public interest. 
‘‘(c) LOCAL DISTRIBUTION FACILITIES.—The re-
quirements of subsection (a) shall not apply to facilities 
used in local distribution. 
‘‘(d) EXEMPTION
TERMINATION.—Whenever the 
Commission, after an evidentiary hearing held upon a 
complaint and after giving consideration to reliability 
standards established under section 215, finds on the 
basis of a preponderance of the evidence that any exemp-
tion granted pursuant to subsection (b) unreasonably im-
697 
pairs the continued reliability of an interconnected trans-
mission system, it shall revoke the exemption granted to 
that transmitting utility. 
‘‘(e) APPLICATION
TO UNREGULATED TRANSMIT-
TING UTILITIES.—The rate changing procedures applica-
ble to public utilities under subsections (c) and (d) of sec-
tion 205 are applicable to unregulated transmitting utili-
ties for purposes of this section. 
‘‘(f) REMAND.—In exercising its authority under 
paragraph (1) of subsection (a), the Commission may re-
mand transmission rates to an unregulated transmitting 
utility for review and revision where necessary to meet the 
requirements 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
698 
facilities to an RTO or any other Commission-approved 
independent transmission organization designated to pro-
vide nondiscriminatory transmission access. 
‘‘(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 
retail consumers, facilitate wholesale competition, improve 
efficiencies in transmission grid management, promote 
grid reliability, remove opportunities for unduly discrimi-
natory or preferential transmission practices, and provide 
for the efficient development of transmission infrastruc-
ture needed to meet the growing demands of competitive 
wholesale power markets, all transmitting utilities in inter-
state commerce should voluntarily become members of Re-
gional Transmission Organizations as defined in section 
3 of the Federal Power Act.
699 
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 Commis-
sion 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 
Regulations (in this section referred to as ‘‘Order 
No. 2000’’), including an identification of each pub-
lic utility and other entity included within the pro-
posed membership of the regional transmission orga-
nization. 
(2) A brief description of the status of each 
pending regional transmission organization applica-
tion, 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.
700 
(4) For any application that has not been fi-
nally approved by the Commission, an explanation 
by the Commission of why the items described pur-
suant to paragraph (3) constitute material non-
compliance with the requirements of the Commis-
sion’s Order No. 2000 sufficient to justify denial of 
approval by the Commission. 
(5) For all regional transmission organization 
applications filed pursuant to the Commission’s 
Order No. 2000, whether finally approved or not— 
(A) a discussion of that regional trans-
mission organization’s efforts to minimize rate 
seams between itself and— 
(i) other regional transmission organi-
zations; and 
(ii) entities not participating in a re-
gional transmission organization; 
(B) a discussion of the impact of such 
seams on consumers and wholesale competition; 
and 
(C) a discussion of minimizing cost-shifting 
on consumers. 
SEC. 1234. FEDERAL UTILITY PARTICIPATION IN REGIONAL 
TRANSMISSION ORGANIZATIONS. 
(a) DEFINITIONS.—For purposes of this section—
701 
(1) APPROPRIATE FEDERAL REGULATORY AU-
THORITY.—The term ‘‘appropriate Federal regu-
latory authority’’ means— 
(A) with respect to a Federal power mar-
keting agency (as defined in the Federal Power 
Act), the Secretary of Energy, except that the 
Secretary may designate the Administrator of a 
Federal power marketing agency to act as the 
appropriate Federal regulatory authority with 
respect to the transmission system of that Fed-
eral power marketing agency; and 
(B) with respect to the Tennessee Valley 
Authority, the Board of Directors of the Ten-
nessee Valley Authority. 
(2) FEDERAL
UTILITY.—The term ‘‘Federal 
utility’’ means a Federal power marketing agency or 
the Tennessee Valley Authority. 
(3) TRANSMISSION SYSTEM.—The term ‘‘trans-
mission system’’ means electric transmission facili-
ties owned, leased, or contracted for by the United 
States and operated by a Federal utility. 
(b) TRANSFER.—The appropriate Federal regulatory 
authority is authorized to enter into a contract, agreement 
or other arrangement transferring control and use of all 
or part of the Federal utility’s transmission system to an
702 
RTO or ISO (as defined in the Federal Power Act), ap-
proved by the Federal Energy Regulatory Commission. 
Such contract, agreement or arrangement shall include— 
(1) performance standards for operation and 
use of the transmission system that the head of the 
Federal utility determines necessary or appropriate, 
including standards that assure recovery of all the 
Federal utility’s costs and expenses related to the 
transmission facilities that are the subject of the 
contract, agreement or other arrangement; consist-
ency with existing contracts and third-party financ-
ing arrangements; and consistency with said Federal 
utility’s statutory authorities, obligations, and limi-
tations; 
(2) provisions for monitoring and oversight by 
the Federal utility of the RTO’s or ISO’s fulfillment 
of the terms and conditions of the contract, agree-
ment or other arrangement, including a provision for 
the resolution of disputes through arbitration or 
other means with the regional transmission organi-
zation or with other participants, notwithstanding 
the obligations and limitations of any other law re-
garding arbitration; and 
(3) a provision that allows the Federal utility to 
withdraw from the RTO or ISO and terminate the
973 
(4) Section 1371(d)(1) is amended by striking 
‘‘section 50(a)(4)’’ and inserting ‘‘section 50(a)(5)’’. 
(c) TECHNICAL AMENDMENTS.— 
(1) Section 46 (relating to amount of credit) is 
amended by striking ‘‘and’’ at the end of paragraph 
(2), by striking the period at the end of paragraph 
(3) and inserting ‘‘, and’’, and by adding at the end 
the following new paragraph: 
‘‘(4) the clean coal technology credit.’’. 
(2) Section 49(a)(1)(C) is amended by striking 
‘‘and’’ at the end of clause (ii), by striking the pe-
riod at the end of clause (iii) and inserting ‘‘, and’’, 
and by adding at the end the following new clause: 
‘‘(iv) the portion of the basis of any 
qualified clean coal property (as defined by 
section 48A(c)).’’. 
(3) The table of sections for subpart E of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 48 the fol-
lowing new item: 
‘‘Sec. 48A. Clean coal technology credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after December 31, 
2003, under rules similar to the rules of section 48(m) 
of the Internal Revenue Code of 1986 (as in effect on the