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results of the study conducted under subsection (a), in-
cluding recommendations to Congress and the States for
any suggested legislative or regulatory changes.
Subtitle D—Transmission Rate
Reform
SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT.
Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:
‘‘SEC. 218. TRANSMISSION INFRASTRUCTURE INVESTMENT.
‘‘(a) RULEMAKING REQUIREMENT.—Within 1 year
after the enactment of this section, the Commission shall
establish, by rule, incentive-based (including, but not lim-
ited to performance-based) rate treatments for the trans-
mission of electric energy in interstate commerce by public
utilities for the purpose of benefiting consumers by ensur-
ing reliability and reducing the cost of delivered power by
reducing transmission congestion. Such rule shall—
‘‘(1) promote reliable and economically efficient
transmission and generation of electricity by pro-
moting capital investment in the enlargement, im-
provement, maintenance and operation of facilities
for the transmission of electric energy in interstate
commerce;
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‘‘(2) provide a return on equity that attracts
new investment in transmission facilities (including
related transmission technologies);
‘‘(3) encourage deployment of transmission
technologies and other measures to increase the ca-
pacity and efficiency of existing transmission facili-
ties and improve the operation of such facilities; and
‘‘(4) allow recovery of all prudently incurred
costs necessary to comply with mandatory reliability
standards issued pursuant to section 215 of this
Act.
The Commission may, from time to time, revise such rule.
‘‘(b) ADDITIONAL INCENTIVES FOR RTO PARTICIPA-
TION.—In the rule issued under this section, the Commis-
sion shall, to the extent within its jurisdiction, provide for
incentives to each transmitting utility or electric utility
that joins a Regional Transmission Organization or Inde-
pendent System Operator. Incentives provided by the
Commission pursuant to such rule shall include—
‘‘(1) recovery of all prudently incurred costs to
develop and participate in any proposed or approved
RTO, ISO, or independent transmission company;
‘‘(2) recovery of all costs previously approved by
a State commission which exercised jurisdiction over
the transmission facilities prior to the utility’s par-
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ticipation in the RTO or ISO, including costs nec-
essary to honor preexisting transmission service con-
tracts, in a manner which does not reduce the reve-
nues the utility receives for transmission services for
a reasonable transition period after the utility joins
the RTO or ISO;
‘‘(3) recovery as an expense in rates of the
costs prudently incurred to conduct transmission
planning and reliability activities, including the costs
of participating in RTO, ISO and other regional
planning activities and design, study and other
precertification costs involved in seeking permits and
approvals for proposed transmission facilities;
‘‘(4) a current return in rates for construction
work in progress for transmission facilities and full
recovery of prudently incurred costs for constructing
transmission facilities;
‘‘(5) formula transmission rates; and
‘‘(6) a maximum 15 year accelerated deprecia-
tion on new transmission facilities for rate treatment
purposes.
The Commission shall ensure that any costs recoverable
pursuant to this subsection may be recovered by such util-
ity through the transmission rates charged by such utility