I
106TH CONGRESS
1ST SESSION
H. R. 1828
To provide for a more competitive electric power industry, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 17, 1999
Mr. BLILEY (for himself and Mr. DINGELL) (both by request) introduced the
following bill; which was referred to the Committee on Commerce, and
in addition to the Committees on Resources, Agriculture, Transportation
and Infrastructure, and the Judiciary, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To provide for a more competitive electric power industry,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Comprehensive Elec-
tricity Competition Act’’.
SEC. 2. TABLE OF CONTENTS.
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—RETAIL ELECTRIC SERVICE
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Sec. 101. Retail competition.
Sec. 102. Authority to impose reciprocity requirements.
Sec. 103. Aggregation for purchase of retail electric energy.
TITLE II—CONSUMER PROTECTION
Sec. 201. Consumer information.
Sec. 202. Access to electric service for low-income consumers.
Sec. 203. Unfair trade practices.
Sec. 204. Residential electricity consumer database.
Sec. 205. Model retail supplier code.
Sec. 206. Model electric utility worker code.
TITLE III—FACILITATING STATE AND REGIONAL REGULATION
Sec. 301. Clarification of State and Federal authority over retail transmission
services.
Sec. 302. Interstate compacts on regional transmission planning.
Sec. 303. Backup authority to impose a charge on an ultimate consumer’s re-
ceipt of electric energy.
Sec. 304. Authority to establish and require independent regional system oper-
ation.
TITLE IV—PUBLIC BENEFITS
Sec. 401. Public benefits fund.
Sec. 402. Federal renewable portfolio standard.
Sec. 403. Net metering.
Sec. 404. Reform of section 210 of PURPA.
Sec. 405. Interconnections for certain facilities.
Sec. 406. Rural and remote communities electrification grants.
Sec. 407. Indian tribe assistance.
Sec. 408. Office of Indian Energy Policy and Programs.
Sec. 409. Southeast Alaska electrical power.
TITLE V—REGULATION OF MERGERS AND CORPORATE
STRUCTURE
Sec. 501. Reform of holding company regulation under PUHCA.
Sec. 502. Electric company mergers.
Sec. 503. Remedial measures for market power.
TITLE VI—ELECTRIC RELIABILITY
Sec. 601. Electric reliability organization and oversight.
Sec. 602. Electricity outage investigation.
Sec. 603. Additional transmission capacity.
TITLE VII—ENVIRONMENTAL PROTECTION
Sec. 701. Nitrogen oxides cap and trade program.
TITLE VIII—FEDERAL POWER SYSTEMS
Subtitle A—Tennessee Valley Authority
Sec. 801. Definition.
Sec. 802. Application of Federal Power Act.
Sec. 803. Antitrust coverage.
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Sec. 804. TVA power sales.
Sec. 805. Renegotiation of long-term power contracts.
Sec. 806. Stranded cost recovery.
Sec. 807. Conforming amendments.
Subtitle B—Bonneville Power Administration
Sec. 811. Definitions.
Sec. 812. Application of Federal Power Act.
Sec. 813. Surcharge on transmission rates to recover otherwise non-recoverable
costs.
Sec. 814. Complaints.
Sec. 815. Review of commission orders.
Sec. 816. Conforming amendments.
Subtitle C—Western Area Power Administration and Southwestern Power
Administration
Sec. 821. Definitions.
Sec. 822. Application of Federal Power Act.
Sec. 823. Surcharge on transmission rates to recover otherwise non-recoverable
costs.
Sec. 824. Conforming amendments.
TITLE IX—OTHER PROVISIONS
Sec. 901. Treatment of nuclear decommissioning costs in bankruptcy.
Sec. 902. Energy Information Administration study of impacts of competition
in electricity markets.
Sec. 903. Antitrust savings clause.
Sec. 904. Elimination of antitrust review by the Nuclear Regulatory Commis-
sion.
Sec. 905. Environmental laws savings clause.
Sec. 906. Generating plant efficiency study.
Sec. 907. Conforming amendments.
TITLE I—RETAIL ELECTRIC
SERVICE
SEC. 101. RETAIL COMPETITION.
(a) RETAIL COMPETITION.—The Public Utility Regu-
latory Policies Act of 1978 (referred to in this Act as
PURPA) is amended by adding after section 608 the fol-
lowing new section:
‘‘SEC. 609. RETAIL COMPETITION.
‘‘(a) DEFINITIONS.—For purposes of this section,
‘retail stranded costs’ means the amount of net costs in-
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curred or obligations undertaken before the date of enact-
ment of the Comprehensive Electricity Competition Act by
a distribution utility that—
‘‘(1) were incurred or undertaken by that dis-
tribution utility in order to comply with a legal obli-
gation on that utility to provide electricity to electric
consumers in its service territory, and
‘‘(2) cannot be recovered because of implemen-
tation of retail competition under subsection (b).
‘‘(b) RETAIL COMPETITION REQUIREMENT.—Except
as provided in subsection (c), not later than January 1,
2003, any distribution utility that has the capability to
deliver electric energy to an electric consumer over its fa-
cilities shall offer open access to those facilities for the
sale of electric energy to the consumer and shall do so
at rates, terms, and conditions that are not unduly dis-
criminatory or preferential, as determined by the appro-
priate regulatory authority.
‘‘(c) OPT OUT.—(1) A State regulatory authority
(with respect to a distribution utility for which it has rate-
making authority) may direct a distribution utility not to
implement the retail competition requirement described in
subsection (b) if the State regulatory authority finds, after
notice and opportunity for hearing, that implementation
of the retail competition requirement by the distribution
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utility will have a negative impact on a class of customers
of that utility that cannot be mitigated.
‘‘(2) A nonregulated distribution utility may deter-
mine not to implement the retail competition requirement
described in subsection (b) if it finds, after notice and op-
portunity for hearing, that implementation of the retail
competition requirement by the distribution utility will
have a negative impact on a class of customers of that
utility that cannot be mitigated.
‘‘(3) The State regulatory authority (with respect to
a distribution utility for which it has ratemaking author-
ity) or nonregulated distribution utility shall publish the
determination and its basis and shall file a notice with
the Commission of its determination by January 1, 2002.
‘‘(d) NOTICE OF RETAIL COMPETITION.—A State
regulatory authority (with respect to a distribution utility
for which it has ratemaking authority) or nonregulated
distribution utility shall file with the Commission a notice
that the distribution utility has implemented or will imple-
ment retail competition consistent with subsection (b).
The notice shall describe the implementation of retail com-
petition. The notice is effective for purposes of section
118, 119, 119A, and 119B of this Act and sections
212(h), 216, and 217 of the Federal Power Act on the
date the notice is filed or the date of implementation of
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retail competition consistent with subsection (b), which-
ever is later.
‘‘(e) CONSIDERATION
OF RECOVERY
OF RETAIL
STRANDED COSTS.—(1) If a State regulatory authority or
nonregulated distribution utility conducts a public pro-
ceeding before a distribution utility implements retail com-
petition as required under subsection (b), as part of this
proceeding, the State regulatory authority or nonregulated
distribution utility shall consider the appropriate mecha-
nism to address recovery by a distribution utility for which
it has ratemaking authority of retail stranded costs that
are legitimate, prudent, and verifiable, if the utility has
taken all reasonable steps to mitigate the costs, including
assistance for workers who are employed or were most re-
cently employed by an electric utility and who may become
or have become unemployed as a result of the implementa-
tion of retail competition. A charge imposed for purposes
of recovering retail stranded costs or providing assistance
for unemployed workers should be imposed in a manner
so as to minimize to the fullest extent possible any effect
on an electric consumer’s choice among competing sup-
pliers or products.
‘‘(2) If a State regulatory authority or nonregulated
utility imposes or allows a charge to recover retail strand-
ed costs under paragraph (1), it shall consider reducing
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the charge on an electric consumer who uses electric en-
ergy produced on-site when the charge results from the
use of new on-site generation produced by—
‘‘(A) a fuel cell,
‘‘(B) a facility with an efficiency rate of at least
50 percent,
‘‘(C) a facility that uses a single fuel source to
produce at the point of use either electric or me-
chanical power and thermal energy and that has a
combined efficiency rate of at least 50 percent, or
‘‘(D) a renewable resource.
‘‘(f) ENFORCEMENT.—Any person may bring an ac-
tion in the appropriate State court against a State regu-
latory authority, a distribution utility, or a nonregulated
distribution utility for failure to comply with this section.
Filing an action challenging whether retail competition is
being implemented consistent with subsection (b) makes
a notice of retail competition ineffective for purposes of
section 118, 119, 119A, and 199B of this Act and sections
212(h), 216, and 217 of the Federal Power Act until final
resolution of the action. Notwithstanding any other law,
a court created under Article III of the Constitution does
not have jurisdiction over an action arising under this sec-
tion.’’.
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(b) DEFINITIONS.—Section 3 of PURPA is amended
by adding after paragraph (21) the following new para-
graphs:
‘‘(22) The term ‘notice of retail competition’
means a notice filed under section 609(d).
‘‘(23) The term ‘distribution utility’ means a
person, State agency, or any other non-federal entity
that owns or operates a local distribution facility
used for the sale of electric energy to an electric con-
sumer.
‘‘(24) The term ‘nonregulated distribution util-
ity’ means a distribution utility not subject to the
ratemaking authority of a State regulatory author-
ity.’’
SEC. 102. AUTHORITY TO IMPOSE RECIPROCITY REQUIRE-
MENTS.
PURPA is amended by adding the following new sec-
tion after section 117:
‘‘SEC. 118. AUTHORITY TO IMPOSE RECIPROCITY REQUIRE-
MENTS.
‘‘(a) STATE REGULATORY AUTHORITY.—If a State
regulatory authority files a notice of retail competition
with respect to a distribution utility, beginning on the ef-
fective date of the notice, the State regulatory authority
may prohibit any other distribution utility located in the
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United States over which it does not have ratemaking au-
thority (and any affiliate of such a utility, as defined
under the Public Utility Holding Company Act of 1999)
from selling electric energy to electric consumers of a dis-
tribution facility covered by the notice of retail competi-
tion, unless a notice of retail competition has been filed
with respect to the other distribution utility.
‘‘(b) NONREGULATED DISTRIBUTION UTILITY.—If a
nonregulated distribution utility files a notice of retail
competition, beginning on the effective date of the notice,
it may prohibit any other distribution utility located in the
United States (and any affiliate of such a utility, as de-
fined under the Public Utility Holding Company Act of
1999) from selling electric energy to electric consumers
of the nonregulated distribution utility covered by the no-
tice unless a notice of retail competition has been filed
with respect to the other distribution utility.’’.
SEC. 103. AGGREGATION FOR PURCHASE OF RETAIL ELEC-
TRIC ENERGY.
PURPA is amended by adding the following new sec-
tion after section 118 as added by section 102 of this Act:
‘‘SEC. 119. AGGREGATION FOR PURCHASE OF RETAIL ELEC-
TRIC ENERGY.
‘‘Notwithstanding any other provision of Federal or
State law, and subject to legitimate and nondiscriminatory
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State requirements imposed on retail electric suppliers, a
group of customers or any entity acting on behalf of such
group may acquire retail electric energy on an aggregate
basis if the group of customers is served by one or more
distribution utilities for which a State regulatory authority
or nonregulated distribution utility has filed a notice of
retail competition under section 609 of this Act for each
distribution utility.’’.
TITLE II—CONSUMER
PROTECTION
SEC. 201. CONSUMER INFORMATION.
PURPA is amended by adding the following new sec-
tion after section 119 as added by section 103 of this Act:
‘‘SEC. 119A. CONSUMER INFORMATION DISCLOSURE.
‘‘(a) DISCLOSURE
RULES.—Not later than six
months after the date of enactment of this Act, the Sec-
retary, in consultation with the Commission, the Adminis-
trator of the Environmental Protection Agency, and the
Federal Trade Commission, shall issue rules prescribing
the form, content, placement, and timing of the supplier
disclosure required under subsections (b) and (c) of this
section. The rules shall be prescribed in accordance with
section 553 of title 5, United States Code.
‘‘(b) DISCLOSURE TO ELECTRIC CONSUMERS.—An
electric utility that offers to sell electric energy to an elec-
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tric consumer shall provide the electric consumer, to the
extent practicable and in accordance with rules issued
under subsection (a), a statement containing the following
information:
‘‘(1) The nature of the service being offered, in-
cluding information about interruptibility or curtail-
ment of service;
‘‘(2) The price of the electric energy, including
a description of any variable charges;
‘‘(3) A description of all other charges associ-
ated with the service being offered including, but not
limited to, access charges, exit charges, back-up
service charges, stranded cost recovery charges, and
customer service charges;
‘‘(4) Information concerning the type of energy
resource used to generate the electric energy and the
environmental attributes of the generation (including
air emissions characteristics); and
‘‘(5) Any other information the Secretary deter-
mines can be provided feasibly and would be useful
to consumers in making purchasing decisions.
‘‘(c) DISCLOSURE TO WHOLESALE CUSTOMERS.—In
every sale of electric energy for resale, the seller shall pro-
vide to the purchaser the information respecting the type
of energy resource used to generate the electric energy and
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the environmental attributes of the generation required by
rules established under subsection (a).
‘‘(d) FEDERAL
TRADE
COMMISSION
ENFORCE-
MENT.—A violation of a rule prescribed under this section
shall constitute an unfair or deceptive act or practice in
violation of section 5 of the Federal Trade Commission
Act (15 U.S.C. 45) and shall be treated as a violation of
a rule under section 18 of the Federal Trade Commission
Act (15 U.S.C. 57a). All functions and powers of the Fed-
eral Trade Commission under the Federal Trade Commis-
sion Act are available to enforce compliance with this sec-
tion notwithstanding jurisdictional limitations in the Fed-
eral Trade Commission Act.
‘‘(e) AUTHORITY TO OBTAIN INFORMATION.—Au-
thority to obtain information under section 11 of the En-
ergy Supply and Environmental Coordination Act of 1974
(15 U.S.C. 796) is available to the Secretary to administer
this section and to the Federal Trade Commission to en-
force this section. In order to carry out its duties under
this section, the Federal Trade Commission may use any
of its powers under sections 3, 6, 9, and 20 of the Federal
Trade Commission Act (15 U.S.C. 43, 46, 49, and 57b–
2) without regard to the limitations contained in section
20(b) of that Act (15 U.S.C. 57b–2(b)) or any jurisdic-
tional limitations contained in that Act.
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‘‘(f) ENFORCEMENT BY STATES.—(1) When a State
determines that the interests of its residents have been
or are being threatened or adversely affected because any
person is violating or has violated a rule of the Secretary
under this section, the State may bring a civil action on
behalf of its residents in an appropriate district court of
the United States to—
‘‘(A) enjoin the violation;
‘‘(B) enforce compliance with the rule of the
Secretary;
‘‘(C) obtain damages, restitution, or other com-
pensation on behalf of its residents; or
‘‘(D) obtain other relief the court considers ap-
propriate.
‘‘(2) The State shall serve prior written notice of any
civil action under this subsection upon the Federal Trade
Commission and provide the Federal Trade Commission
with a copy of its complaint, except that if it is not feasible
for the State to provide this prior notice, the State shall
serve the notice immediately upon instituting the action.
Upon receiving a notice respecting a civil action, the Fed-
eral Trade Commission may—
‘‘(A) intervene in the action, and
‘‘(B) upon so intervening, be heard on all mat-
ters arising in the action and file petition for appeal.
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‘‘(3) For purposes of bringing any civil action under
this subsection, this section does not prevent a State offi-
cial from exercising the powers conferred by State law to
conduct investigations, administer oaths or affirmations,
or compel the attendance of witnesses or the production
of documentary and other evidence.
‘‘(4) While a civil action instituted by or on behalf
of the Federal Trade Commission for violation of any rule
prescribed under this subsection is pending, a State may
not institute a civil action under this section against a de-
fendant named in the complaint in the pending action for
a violation alleged in the complaint.
‘‘(5) A civil action brought under this subsection may
be brought in the district in which the defendant is found,
is an inhabitant, or transacts business or wherever venue
is proper under section 1391 of title 28, United States
Code. Process in such an action may be served in any dis-
trict in which the defendant is an inhabitant or in which
the defendant may be found.
‘‘(6) This section does not prohibit a State from pro-
ceeding in State court on the basis of an alleged violation
of a State or criminal statute.’’.
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SEC. 202. ACCESS TO ELECTRIC SERVICE FOR LOW-INCOME
CONSUMERS.
PURPA is amended by adding the following new sec-
tion after section 119A as added by section 201 of this
Act.
‘‘SEC. 119B. ACCESS TO ELECTRIC SERVICE FOR LOW-IN-
COME CONSUMERS.
‘‘(a) DEFINITIONS.—For purposes of this section
‘low-income residential consumer’ is a household, as de-
fined in section 2603(4) of the Low-Income Energy Assist-
ance Act of 1981 (42 U.S.C. 8622(4)), with an annual
income that—
‘‘(1) does not exceed 60 percent of the State
median income, as defined in section 2603(9) of the
Low-Income Home Energy Assistance Act of 1981
(42 U.S.C. 8622(9)), of the State where the house-
hold is located, or
‘‘(2) meets the eligibility criteria for a low-in-
come energy program operated by the State where
the household is located.
‘‘(b) APPLICABILITY.—Each State regulatory author-
ity and nonregulated distribution utility that files a notice
of retail competition under section 609 of this Act shall
conduct a proceeding to determine whether to apply the
principles of subsection (c).
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‘‘(c) PRINCIPLES.—The following are principles for
providing electric service to low-income residential con-
sumers:
‘‘(1) A State regulatory authority or nonregu-
lated distribution utility shall assure that its low-in-
come residential consumers obtain benefits from re-
tail competition comparable to its other residential
consumers.
‘‘(2) As a condition of offering retail service to
residential consumers in a State, a retail electric
supplier shall agree to—
‘‘(A) offer, promote, and provide, upon re-
quest, retail electric service to a low-income res-
idential consumer on rates, terms, and condi-
tions comparable to those offered to other resi-
dential consumers located in the same area
where the low-income residential consumer is lo-
cated, and
‘‘(B) share equitably with other retail elec-
tric suppliers in the State any costs necessary
to provide service to low-income residential con-
sumers under subparagraph (A).’’.
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SEC. 203. UNFAIR TRADE PRACTICES.
The Federal Trade Commission Act (15 U.S.C. 41
et seq.) is amended by inserting the following new section
after section 5:
‘‘SEC. 5A. ELECTRICITY SUPPLY UNFAIR TRADE PRAC-
TICES.
‘‘(a) DEFINITION.—For purposes of this section, ‘re-
tail electric supplier’ has the meaning given that term in
section 3(25) of the Public Utility Regulatory Policies Act
of 1978.
‘‘(b) SLAMMING.—(1) The Federal Trade Commis-
sion shall establish rules in accordance with section 553
of title 5, United States Code for the submittal and
verification of a retail electric customer’s selection or
change in selection of a retail electric supplier and for the
assessment of penalties for violation of these rules. These
rules shall ensure that the customer receives electric serv-
ice from the retail electric supplier of the customer’s
choice.
‘‘(2) A person shall not submit or change the selec-
tion made by a retail electric customer except in accord-
ance with procedures established in paragraph (1).
‘‘(c) CRAMMING.—(1) The Federal Trade Commis-
sion shall establish rules in accordance with section 553
of title 5, United States Code for obtaining the consent
of a retail electric customer for purchase of goods and
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services other than those expressly authorized by law or
by the customer’s electricity supply and metering agree-
ment and for the assessment of penalties for violation of
these rules.
‘‘(2) A person shall not charge a retail electric cus-
tomer for a particular service except in accordance with
procedures established in paragraph (1).
‘‘(d) FEDERAL
TRADE
COMMISSION
ENFORCE-
MENT.—Violation of this section or of a rule prescribed
under this section constitutes an unfair and deceptive act
or practice in violation of section 5 of this Act and shall
be treated as a violation of a rule under section 18 of this
Act. All functions and powers of the Federal Trade Com-
mission under this Act are available to the Federal Trade
Commission to enforce compliance with this section not-
withstanding any jurisdictional limitations in this Act.
‘‘(e) STATE PROCEEDINGS AND OTHER REMEDIES.—
(1) This section does not preclude a State or State com-
mission from prescribing and enforcing additional laws,
regulations, or procedures regarding the practices which
are the subject of this section, so long as such laws, regu-
lations or procedures do not conflict with the provisions
of this section or with any rule prescribed by the FTC
pursuant to it.
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‘‘(2) The remedies provided by this section are in ad-
dition to any other remedies available by law.’’.
SEC. 204. RESIDENTIAL ELECTRICITY CONSUMER DATA-
BASE.
PURPA is amended by adding the following new sec-
tion after section 119B as added by section 202 of this
Act:
‘‘SEC. 119C. RESIDENTIAL ELECTRICITY CONSUMER DATA-
BASE.
‘‘(a) DATABASE.—The Secretary is authorized to
compile a database to provide residential electric con-
sumers with information to compare the offers of various
retail electric suppliers.
‘‘(b) INFORMATION.—A retail electric supplier who
provides electric consumers with information under section
119A shall provide the Secretary the same information
and any other information the Secretary considers appro-
priate for purposes of this section.
‘‘(c) CONTENT.—The database under this program
shall—
‘‘(1) compare the rates, terms, and conditions
of the service offered by the various retail electric
suppliers based on the information provided under
subsection (b);
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‘‘(2) disseminate the comparison to consumers
through various communications channels, including
the Internet; and
‘‘(3) provide other information the Secretary
considers appropriate to carry out the purposes of
this section.’’.
SEC. 205. MODEL RETAIL SUPPLIER CODE.
PURPA is amended by adding the following new sec-
tion after section 119C as added by section 204 of this
Act:
‘‘SEC. 119D. MODEL CODE FOR RETAIL SUPPLIERS.
‘‘The Secretary shall develop by rule and circulate
among the States for their consideration a model code for
the regulation of retail electric suppliers for the protection
of electric consumers.’’.
SEC. 206. MODEL ELECTRIC UTILITY WORKER CODE.
PURPA is amended by adding the following new sec-
tion after section 119D as added by section 205 of this
Act:
‘‘SEC. 119E. MODEL CODE FOR ELECTRIC UTILITY WORK-
ERS.
‘‘(a) The Secretary shall develop by rule and circulate
among the States for their consideration a model code con-
taining standards for electric facility workers to ensure
electric facility safety and reliability. The Secretary, in de-
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veloping these standards, shall consult with all interested
parties, including representatives of electric facility work-
ers.
‘‘(b) In issuing a model code under this section, the
Secretary shall not, for purposes of section 653 of title
29, be deemed to be exercising statutory authority to pre-
scribe or enforce standards or regulations affecting occu-
pational safety and health.’’.
TITLE III—FACILITATING STATE
AND REGIONAL REGULATION
SEC. 301. CLARIFICATION OF STATE AND FEDERAL AU-
THORITY OVER RETAIL TRANSMISSION SERV-
ICES.
(a) NONPREEMPTION
OF STATE
AND NONREGU-
LATED UTILITY AUTHORITY TO ORDER RETAIL WHEEL-
ING AND TO IMPOSE LOCAL DELIVERY CHARGES.—Sec-
tion 201(b) of the Federal Power Act (referred to in this
Act as ‘‘the FPA’’) is amended by adding the following
new paragraph after paragraph (2):
‘‘(3) This Act does not preempt or otherwise affect
any authority under the law of a State or municipality
to—
‘‘(A) require unbundled transmission and local
distribution services for the delivery of electric en-
ergy directly to an ultimate consumer, but if
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unbundled transmission is in interstate commerce,
the rates, terms, and conditions of the transmission
are subject to the exclusive jurisdiction of the Com-
mission under this Part, or
‘‘(B) impose a delivery charge on an ultimate
consumer’s receipt of electric energy.’’.
(b) OPEN ACCESS TRANSMISSION AUTHORITY; RE-
TAIL WHEELING IN RETAIL COMPETITION STATES.—
(1) APPLICABILITY
OF
OPEN
ACCESS
TRANS-
MISSION RULES.—Section 206 of the FPA is amend-
ed by adding the following new subsection after sub-
section (d):
‘‘(e) OPEN ACCESS TRANSMISSION SERVICES.—(1)
Under section 205 and this section, the Commission may
require, by rule or order, public utilities to provide open
access transmission services, subject to section 212(h),
and may authorize recovery of stranded costs, as defined
by the Commission, arising from any requirement to pro-
vide open access transmission services. This section ap-
plies to any rule or order issued by the Commission before
the date of enactment of the Comprehensive Electricity
Competition Act.’’.
(2) AUTHORITY
TO
ORDER
RETAIL
WHEEL-
ING.—Section 212(h) of the FPA is amended—
(A) by inserting ‘‘(1)’’ before ‘‘No’’;
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(B) by striking ‘‘(1)’’, ‘‘(2)’’, ‘‘(A)’’, and
‘‘(B)’’ and inserting in their places ‘‘(A)’’,
‘‘(B)’’, ‘‘(i)’’, and ‘‘(ii)’’ respectively;
(C) by striking from redesignated para-
graph (1)(B)(ii) ‘‘the date of enactment of this
subsection’’ and inserting ‘‘October 24, 1992,’’
in its place; and
(D) by adding at the end a new paragraph
as follows:
‘‘(2) Notwithstanding paragraph (1), the Com-
mission may issue an order that requires the trans-
mission of electric energy directly or indirectly to an
ultimate consumer if a notice of retail competition
under section 609 of the Public Utility Regulatory
Policies Act of 1978 has been filed and is in effect
with respect to the ultimate consumer’s distribution
utility or if a distribution utility offers open access
to its delivery facilities to the ultimate consumer.’’.
(3) CONFORMING AMENDMENTS.—
(A) Section 3(23) of the FPA is amended
to read as follows:
‘‘(23) ‘transmitting utility’ means any entity
that owns, controls, or operates electric power trans-
mission facilities that are used for the sale of electric
energy in the 48 contiguous States and the District
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to provide open access transmission services, subject to
section 212(h).
‘‘(B) In exercising its authority under this Act, the
Commission—
‘‘(i) shall take into account the different struc-
tural and operating characteristics of transmitting
utilities, including the multi-tier structure and the
not-for-profit operations of electric cooperatives;
‘‘(ii) with respect to any transmitting utility
that has outstanding loans made or guaranteed by
the Rural Utilities Service, shall take into account
the policies of the Department of Agriculture in im-
plementing the Rural Electrification Act of 1936
and shall assure, to the extent practicable, that the
utility will be able to meet any loan obligations
under that Act; and
‘‘(iii) shall not approve rates, terms, or condi-
tions the Commission determines would have the ef-
fect of jeopardizing the tax exempt status of non-
profit electric cooperatives under the Internal Rev-
enue Code of 1986.
‘‘(C) Notwithstanding any other law, section 205,
this section, and part III apply to a transmitting utility
that is not a public utility or covered by section 201A for
purposes of this section.
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‘‘(3) Any electric utility that owns, directly or indi-
rectly, generation facilities financed in whole or in part
with outstanding loans made or guaranteed by the Rural
Utilities Service may apply to the Commission to impose
a charge for the recovery of stranded costs as defined by
the Commission. If the Commission determines that the
proposed charge is just, reasonable, and not unduly dis-
criminatory or preferential, the Commission may issue an
order providing for the imposition of the charge on trans-
mission service by the applicant or by another transmit-
ting utility or on any electric utility or transaction subject
to the Commission’s jurisdiction.’’.
(d) NOTICE TO AND INTERVENTION OF SECRETARY
OF AGRICULTURE IN FERC PROCEEDINGS.—The FPA is
amended by adding after section 218, as added by section
601 of this Act, the following new section:
‘‘NOTICE TO AND INTERVENTION OF SECRETARY OF
AGRICULTURE IN COMMISSION PROCEEDINGS
‘‘SEC. 219. Any person filing a complaint or petition
for rulemaking under part II of the FPA that directly af-
fects an electric utility with loans made or guaranteed
under the Rural Electrification Act of 1936 shall provide
notice of such complaint or petition to the Secretary of
Agriculture. The Secretary of Agriculture may as a matter
of right intervene or otherwise participate in any pro-
ceeding before the Commission that directly affects an
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electric utility with loans made or guaranteed under the
Rural Electrification Act of 1936. The Secretary of Agri-
culture shall comply with rules of procedure of general ap-
plicability governing the timing of intervention or partici-
pation in such proceeding or activity and, upon inter-
vening or participating therein, shall comply with rules of
procedure of general applicability governing the conduct
thereof.’’.
SEC. 302. INTERSTATE COMPACTS ON REGIONAL TRANS-
MISSION PLANNING.
The FPA is amended by adding after section 214 the
following new section:
‘‘INTERSTATE COMPACTS ON REGIONAL TRANSMISSION
PLANNING
‘‘SEC. 215. (a) The consent of Congress is given for
an agreement to establish a regional transmission plan-
ning agency, if the Commission determines that the agree-
ment would—
‘‘(1) facilitate coordination among the States
within a particular region with regard to the plan-
ning of future transmission, generation, and dis-
tribution facilities,
‘‘(2) carry out State electric facility siting re-
sponsibilities more effectively,
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‘‘(3) meet the other requirements of this section
and rules prescribed by the Commission under this
section, and
‘‘(4) otherwise be consistent with the public in-
terest.
‘‘(b)(1) If the Commission determines that an agree-
ment meets the requirements of subsection (a), the agency
established under the agreement has the authority nec-
essary or appropriate to carry out the agreement. This au-
thority includes authority with respect to matters other-
wise within the jurisdiction of the Commission, if expressly
provided for in the agreement and approved by the Com-
mission.
‘‘(2) The Commission’s determination under this sec-
tion may be subject to any terms or conditions the Com-
mission determines are necessary to ensure that the agree-
ment is in the public interest.
‘‘(c)(1) The Commission shall prescribe—
‘‘(A) criteria for determining whether a regional
transmission planning agreement meets subsection
(a), and
‘‘(B) standards for the administration of a re-
gional transmission planning agency established
under the agreement.
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‘‘(2) The criteria shall provide that, in order to meet
subsection (a)—
‘‘(A) a regional transmission planning agency
must operate within a region that includes all tribal
governments and all or part of each State that is a
party to the agreement,
‘‘(B) a regional transmission planning agency
must be composed of one or more members from
each State and tribal government that is a party to
the agreement,
‘‘(C) each participating State and tribal govern-
ment must vest in the regional transmission plan-
ning agency the authority necessary to carry out the
agreement and this section, and
‘‘(D) the agency must follow workable and fair
procedures in making its decisions, in governing
itself, and in regulating parties to the agreement
with respect to matters covered by the agreement,
including a requirement that all decisions of the
agency be made by majority vote (or majority of
weighted votes) of the members present and voting.
‘‘(3) The criteria may include any other requirement
for meeting subsection (a) that the Commission deter-
mines is necessary to ensure that the regional trans-
mission planning agency’s organization, practices, and
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procedures are sufficient to carry out this section and the
rules issued under it.
‘‘(d) The Commission, after notice and opportunity
for comment, may terminate the approval of an agreement
under this section at any time if it determines that the
regional transmission planning agency fails to comply with
this section or Commission prescriptions under subsection
(c) or that the agreement is contrary to the public interest.
‘‘(e) Section 313 applies to a rehearing before a re-
gional transmission planning agency and judicial review
of any action of a regional transmission planning agency.
For this purpose, when section 313 refers to ‘Commis-
sion’, substitute ‘regional transmission planning agency’
and when section 313(b) refers to ‘licensee or public util-
ity’, substitute ‘entity’.’’.
SEC. 303. BACKUP AUTHORITY TO IMPOSE A CHARGE ON
AN 
ULTIMATE 
CONSUMER’S 
RECEIPT 
OF
ELECTRIC ENERGY.
The FPA is amended by adding the following new
section after section 215 as added by section 302 of this
Act:
‘‘BACKUP AUTHORITY FOR CHARGE ON RECEIPT OF
ELECTRIC ENERGY
‘‘SEC. 216. (a) If a State regulatory authority that
has provided notice of retail competition under section 609
of the Public Utility Regulatory Policies Act of 1978 for
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erential, the Commission may issue an order providing for
the imposition of the charge.’’.
SEC. 304. AUTHORITY TO ESTABLISH AND REQUIRE INDE-
PENDENT REGIONAL SYSTEM OPERATION.
Section 202 of the FPA is amended by adding the
following new subsections after subsection (g):
‘‘(h) Upon its own motion or upon application or
complaint and after notice and an opportunity for a hear-
ing, the Commission may order the establishment of enti-
ties for the purpose of independent operation, control, and
planning of interconnected transmission facilities; order a
transmitting utility to relinquish control over operation of
its transmission facilities to an entity for the purpose of
independent operation, control, and planning of inter-
connected transmission facilities; subject generators to the
control of such entity consistent with other laws to the
extent necessary to permit reliable operation of the trans-
mission facilities; or take any combination of these actions,
if the Commission finds that—
‘‘(1) this action is appropriate to promote com-
petitive electricity markets and efficient, economical,
and reliable operation of the interstate transmission
grid;
‘‘(2) the entity established for the purpose of
independent operation, control, and planning of
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interconnected transmission facilities will operate,
control, and plan the transmission facilities in a
manner that assures that—
‘‘(A) ownership of transmission facilities
provides no advantage in competitive electricity
markets;
‘‘(B) the transmission customers of the
Tennessee Valley Authority (TVA), the Bonne-
ville Power Administration, the Southwestern
Power Administration (SWPA), and the West-
ern Area Power Administration (WAPA) will
not pay an unreasonable share of the entity’s
costs and will not experience unreasonable
transmission rate increases resulting from the
establishment of the entity; and
‘‘(C) as applicable, the respective statutory
and treaty obligations and contractual obliga-
tions existing on the date of enactment of this
Act of the TVA Board of Directors, the Bonne-
ville Administrator, the SWPA Administrator,
the WAPA Administrator, the Bureau of Rec-
lamation, and the Corps of Engineers can be
met;
‘‘(3) any transmitting utility ordered to transfer
control of its transmission facilities will receive just
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and reasonable compensation for the use of its facili-
ties, consistent with section 201A where applicable;
and
‘‘(4) adequate reliability of the affected trans-
mission facilities will be maintained. Nothing in this
section limits States from addressing transmission
facility maintenance, planning, siting, and other util-
ity functions in a manner consistent with this Act or
Commission action under this Act.
‘‘(i) If not ordered under subsection (h), TVA, the
Bonneville Administrator, the SWPA Administrator, or
the WAPA Administrator are authorized to participate in
a regional transmission system operation after conducting
a public process in the relevant service area to receive com-
ments. Notwithstanding any other law, participation may
include delegation of operation and control of the Author-
ity or Administration’s transmission system to that entity,
or other method of participation, under terms and condi-
tions the Authority or Administrator determines necessary
or appropriate, including being bound by operational and
other orders of the entity and by the results of arbitration
of disputes with the entity or with other participants.’’.
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TITLE IV—PUBLIC BENEFITS
SEC. 401. PUBLIC BENEFITS FUND.
PURPA is amended by adding after section 609, as
added by section 101 of this Act, the following new sec-
tion:
‘‘SEC. 610. PUBLIC BENEFITS FUND.
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) the term ‘Board’ means the Joint Board
established under subsection (b)(1);
‘‘(2) the term ‘eligible public purpose program’
means a program that supports one or more of the
following—
‘‘(A) availability of affordable electricity
service to low-income customers,
‘‘(B) implementation of energy conserva-
tion and energy efficiency measures and energy
management practices,
‘‘(C) consumer education,
‘‘(D) the development and demonstration
of an electricity generation technology that the
Secretary determines is emerging from research
and development, provides environmental bene-
fits, and—
‘‘(i) has significant national commer-
cial potential, or
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‘‘(ii) provides energy security or gen-
eration resource diversity benefits, or
‘‘(E) rural assistance subsequent to a de-
termination made under subsection (d)(4);
‘‘(3) the term ‘fiscal agent’ means the entity
designated under subsection (b)(2)(B);
‘‘(4) the term ‘Fund’ means the Public Benefits
Fund established under subsection (b)(2)(A); and
‘‘(5) the term ‘State’ means each of the 48 con-
tiguous States and the District of Columbia.
‘‘(b) JOINT BOARD.—(1) A Joint Board is estab-
lished whose membership is composed of two officers or
employees of the United States Government appointed by
the Secretary, four State commissioners appointed by the
national organization of State commissions, and one mem-
ber of an Indian tribal government appointed by the Sec-
retary. The Secretary shall designate the Chair of the
Board.
‘‘(2) The Board shall—
‘‘(A) establish a Public Benefits Fund
upon petition of States and tribal governments
wishing to participate in the program under
this section,
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‘‘(B) appoint a fiscal agent, from persons
nominated by the States and tribal governments
petitioning to establish the Fund, and
‘‘(C) administer the Fund as set forth in
this section.
‘‘(c) FISCAL AGENT.—The fiscal agent appointed by
the Board shall collect and disburse the amounts in the
Fund as set forth in this section.
‘‘(d) SECRETARY.—The Secretary shall prescribe
rules for—
‘‘(1) the determination of charges under sub-
section (e);
‘‘(2) the collection of amounts for the Fund, in-
cluding provisions for overcollection or undercollec-
tion;
‘‘(3) distribution of amounts from the Fund;
and
‘‘(4) the criteria under which the Board deter-
mines whether a State or tribal government’s pro-
gram is an eligible public purpose program, includ-
ing a rural assistance program. A rural assistance
program shall be an eligible public purpose program
to the extent that the Secretary, in consultation with
the Secretary of Agriculture, determines by rule that
significant adverse economic effects on rural cus-
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tomers have occurred or will occur as a result of
electricity restructuring that meets the retail com-
petition requirements of this Act. After such a deter-
mination is made, the Secretary, in consultation with
the Secretary of Agriculture, shall specify by rule
the mechanism for distribution of funds to rural as-
sistance programs, amounts to be provided, and
variances to the overall requirements to the Public
Benefits Fund under this section, if any. For the
purposes of funding rural assistance programs, the
Secretary shall increase the charge for the Public
Benefit Fund as necessary, up to a maximum of .17
mills per kilowatt hour. Funding for rural assistance
programs under this section shall be provided exclu-
sively from this increase in the charge.
‘‘(e) PUBLIC BENEFITS CHARGE.—(1) As a condition
of existing or future interconnection with facilities of any
transmitting utility, each owner of an electric generating
facility whose capacity exceeds one megawatt shall pay the
transmitting utility a public benefits charge determined
under paragraph (2), even if the generation facility and
the transmitting facility are under common ownership or
are otherwise affiliated. Each importer of electric energy
from Canada or Mexico, as a condition of existing or fu-
ture interconnection with facilities of any transmitting
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utility in the United States, shall pay this same charge
for imported electric energy. The transmitting utility shall
pay the amounts collected to the fiscal agent at the close
of each month, and the fiscal agent shall deposit the
amounts into the Fund as offsetting collections.
‘‘(2)(A) The Board shall notify the Commission of
the sum of the requests of all States and tribal govern-
ments under subsection (f) within 30 days after receiving
the requests.
‘‘(B) The Commission shall calculate the rate for the
public benefits charge for each calendar year at an
amount, not in excess of 1 mill per kilowatt-hour, equal
to the sum of the requests of all States and tribal govern-
ments under subsection (f) for programs described in sub-
section (a)(2)(A) through (a)(2)(D), but not to exceed $3
billion per year, divided by the estimated kilowatt hours
of electric energy to be generated by generators subject
to the charge. Amounts collected in excess of $3 billion
in a fiscal year shall be retained in the fund and the as-
sessment in the following year shall be reduced by that
amount. If there are more than de minimis receipts from
the sale of Renewable Energy Credits under section 611,
the Secretary shall direct the Commission to reduce the
charge to reflect the amount of receipts received from the
sale of Credits. The amount of the receipts from the sale
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of Renewable Energy Credits deposited in the Public Ben-
efits Fund may not exceed $3 billion per year adjusted
for inflation. Receipts from the sale of Renewable Energy
Credits in excess of $3 billion per year adjusted for infla-
tion shall be deposited in the General Fund of the Treas-
ury.
‘‘(C) If a finding is made under subsection (d)(4) in
relation to rural customers, the public benefit charge shall
be increased as indicated under subsection (d)(4).
‘‘(f) STATE AND TRIBAL GOVERNMENT PARTICIPA-
TION.—(1) Not later than 90 days before the beginning
of each calendar year, each State and tribal government
seeking to participate in the Fund shall submit to the
Board a request for payments from the Fund for the cal-
endar year in an amount not in excess of 50 percent of
the State or tribal government’s estimated expenditures
for eligible public purpose programs for the year, except
as provided under rules issued under subsection (d)(4) for
rural assistance programs.
‘‘(2) To the extent a State or tribal government gen-
erates all or part of its funds for eligible public purpose
programs through a wires charge on an ultimate con-
sumer’s receipt of electric energy, the State or tribal gov-
ernment shall impose the charge on a non-discriminatory
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basis on all consumers within the State or tribal govern-
ment jurisdiction.
‘‘(3) Notwithstanding subsection (a)(5)—
‘‘(A) Alaska may participate in the Fund as a
State if it certifies to the Board that all generators
within Alaska with a nameplate capacity exceeding
one megawatt shall pay into the Fund at the rate
calculated by the Board during the year in which
Alaska seeks matching funds, and
‘‘(B) Hawaii may participate in the Fund as a
State if it certifies to the Board that all generators
within Hawaii with a nameplate capacity exceeding
one megawatt shall pay into the Fund at the rate
calculated by the Board during the year in which
Hawaii seeks matching funds.
‘‘(g) DISBURSAL FROM THE FUND.—(1) The Board
shall review State and tribal government submissions and
determine whether programs designated by the State or
tribal government are eligible public purpose programs,
using the criteria prescribed under subsection (d), and
whether there is reasonable assurance that spending quali-
fying as State or tribal government matching funds will
occur.
‘‘(2) The fiscal agent shall disburse amounts in the
Fund to participating States and tribal governments to
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carry out eligible public programs in accordance with this
subsection and rules prescribed under subsection (d).
‘‘(3) To the extent the aggregate amount of funds
requested by the States and tribal governments exceeds
the maximum aggregate revenues eligible to be collected
under subsection (e) and deposited as payment for Renew-
able Energy Credits under section 611, the fiscal agent
shall reduce each participating State and tribal govern-
ment’s request proportionately.
‘‘(4)(A) The fiscal agent shall disburse amounts for
a calendar year from the Fund to a State or tribal govern-
ment in twelve equal monthly payments beginning two
months after the beginning of the calendar year. Amounts
disbursed may not exceed the lesser of the State or tribal
government’s request for the fiscal year, after any reduc-
tion required under paragraph (3), or 50 percent of the
State or tribal government’s documented expenditures for
eligible public purpose programs for the calendar year, ex-
cept as provided under rules issued under subsection
(d)(4) for rural assistance programs.
‘‘(B) The fiscal agent shall make distributions to the
State or tribal government or to an entity designated by
the State or tribal government to receive payments. The
State or tribal government may designate a nonregulated
utility as an entity to receive payments under this section.
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‘‘(C) A State or tribal government may use amounts
received only for the eligible public purpose programs the
State or tribal government designated in its submission
to the Board and the Board determined eligible.
‘‘(h) REPORT.—One year before the date of expira-
tion of this section, the Secretary shall report to Congress,
after consultation with the Board, whether a public bene-
fits fund should continue to exist.
‘‘(i) SUNSET.—This section expires at midnight on
December 31 of the fifteenth year after the year the Com-
prehensive Electricity Competition Act is enacted, except
with regard to charges and funding for rural assistance
programs.’’.
SEC. 402. FEDERAL RENEWABLE PORTFOLIO STANDARD.
(a) STANDARD.—PURPA is amended by adding after
section 610, as added by section 401 of this Act, the fol-
lowing new section:
‘‘SEC. 611. FEDERAL RENEWABLE PORTFOLIO STANDARD.
‘‘(a) MINIMUM RENEWABLE GENERATION REQUIRE-
MENT.—(1) For each calendar year beginning with 2000,
a retail electric supplier shall submit to the Secretary Re-
newable Energy Credits in an amount equal to the re-
quired annual percentage, specified in subsection (b), of
the total electric energy sold by the retail electric supplier
to electric consumers in the calendar year. The retail elec-
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tric supplier shall make this submission before April 1 of
the following calendar year.
‘‘(2) For purposes of this section a ‘renewable energy’
resource means solar energy, wind, geothermal, or bio-
mass.
‘‘(3) This section does not preclude a State from re-
quiring additional renewable energy generation in that
State.
‘‘(b) REQUIRED ANNUAL PERCENTAGE.—(1) The
Secretary shall determine the required annual percentage
that is to be applied to all retail electric suppliers for cal-
endar years 2000–2004. This required annual percentage
shall be equal to the percent of the total electric energy
sold, during the most recent calendar year for which infor-
mation is available before the calendar year of the enact-
ment of this section, by retail suppliers to electric cus-
tomers in the United States that is renewable energy.
‘‘(2) The Secretary shall determine the required an-
nual percentage for all retail electric suppliers for calendar
years 2005–2009. This percentage shall be above the per-
centage in paragraph (1) and below the percentage in
paragraph (3) and shall be selected to promote a smooth
transition to the level in paragraph (3).
‘‘(3) For calendar years 2010–2015, the required an-
nual percentage is 7.5 percent.
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‘‘(c) SUBMISSION OF CREDITS.—A retail electric sup-
plier may satisfy the requirements of subsection (a)
through the submission of—
‘‘(1) Renewable Energy Credits issued under
subsection (d) for renewable energy generated by the
retail electric supplier in the calendar year for which
Credits are being submitted or any previous calendar
year,
‘‘(2) Renewable Energy Credits issued under
subsection (d) to any renewable energy generator for
renewable energy generated in the calendar year for
which Credits are being submitted or a previous cal-
endar year and acquired by the retail electric sup-
plier, or
‘‘(3) any combination of Credits under para-
graphs (1) and (2).
‘‘(d) ISSUANCE OF CREDIT.—(1) The Secretary shall
establish, not later than one year after the date of enact-
ment of this section, a program to issue, monitor the sale
or exchange of, and track Renewable Energy Credits.
‘‘(2) Under the program, an entity that generates
electric energy through the use of a renewable energy re-
source may apply to the Secretary for the issuance of Re-
newable Energy Credits. The application shall indicate—
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‘‘(A) the type of renewable energy resource used
to produce the electricity,
‘‘(B) the State in which the electric energy was
produced, and
‘‘(C) any other information the Secretary deter-
mines appropriate.
‘‘(3)(A) Except as provided in paragraph (B), the
Secretary shall issue to an entity one Renewable Energy
Credit for each kilowatt-hour of electric energy the entity
generates through the use of a renewable energy resource
in any State in 2000 and any succeeding year.
‘‘(B) The Secretary shall issue two Renewable En-
ergy Credits for each kilowatt-hour of electric energy gen-
erated through the use of a renewable energy resource in
any State in 2000 and any succeeding year, if the gener-
ating facility is located on Indian land. For purposes of
this paragraph, renewable energy generated by biomass
cofired with other fuels is eligible for two credits only if
the biomass was grown on the land eligible under this
paragraph.
‘‘(C) To be eligible for a Renewable Energy Credit,
the unit of a electricity generated through the use of a
renewable energy resource may be sold or may be used
by the generator. If both a renewable energy resource and
a non-renewable energy resource are used to generate the
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electric energy, the Secretary shall issue credits based on
the proportion of the renewable energy resource used. The
Secretary shall identify Renewable Energy Credits by type
of generation and by the State in which the generating
facility is located.
‘‘(4) In order to receive a Renewable Energy Credit,
the recipient of a Renewable Energy Credit shall pay a
fee, calculated by the Secretary, in an amount that is
equal to the administrative costs of issuing, recording,
monitoring the sale of exchange of, and tracking the Cred-
it or does not exceed five percent of the dollar value of
the Credit, whichever is lower. The Secretary shall retain
the fee and use it to pay these administrative costs.
‘‘(5) When a generator sells electric energy generated
through the use of a renewable energy resource to a retail
electric supplier under a contract subject to section 210
of this Act, the retail electric supplier is treated as the
generator of the electric energy for the purposes of this
section for the duration of the contract.
‘‘(6) The Secretary shall disqualify an otherwise eligi-
ble renewable energy generator from receiving a Renew-
able Energy Credit if the generator has elected to partici-
pate in net metering under section 612.
‘‘(7) If a generator using a renewable energy resource
receives matching funds under section 610, the Secretary
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shall reduce the number of Renewable Energy Credits the
generator receives under paragraphs (3) so that the aggre-
gate value of those Credits plus the matching funds re-
ceived under section 610 equals the aggregate value of the
Credits the generator would have received absent this
paragraph. For purposes of this paragraph, the Secretary
shall value a Credit at a price that is representative of
the price of a Credit in private transactions. In no event
shall the Secretary use a price to establish values for pur-
poses of this paragraph that exceeds the cost cap estab-
lished under subsection (f).
‘‘(e) SALE
OR EXCHANGE.—A Renewable Energy
Credit may be sold or exchanged by the entity to whom
issued or by any other entity who acquires the Credit. A
Renewable Energy Credit for any year that is not used
to satisfy the minimum renewable generation requirement
of subsection (a) for that year may be carried forward for
use in another year.
‘‘(f) RENEWABLE ENERGY CREDIT COST CAP.—Be-
ginning January 1, 2000, the Secretary shall offer Renew-
able Energy Credits for sale. The Secretary shall charge
1.5 cents for each Renewable Energy Credit sold during
calendar year 2000, and on January 1 of each following
year, the Secretary shall adjust for inflation, based on the
Consumer Price Index, the price charged per Credit for
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that calendar year. The Secretary shall deposit in the Pub-
lic Benefits Fund established under section 610 the
amount received from a sale under this subsection.
‘‘(g) ENFORCEMENT.—The Secretary may bring an
action in the appropriate United States district court to
impose a civil penalty on a retail electric supplier that does
not comply with subsection (a). A retail electric supplier
who does not submit the required number of Renewable
Energy Credits under subsection (a) is subject to a civil
penalty of not more than three times the value of the Re-
newable Energy Credits not submitted. For purposes of
this subsection, the value of a Renewable Energy Credit
is the price of a Credit determined under subsection (f)
for the year the Credits were not submitted.
‘‘(h) INFORMATION COLLECTION.—The Secretary
may collect the information necessary to verify and
audit—
‘‘(1) the annual electric energy generation and
renewable energy generation of any entity applying
for Renewable Energy Credits under this section,
‘‘(2) the validity of Renewable Energy Credits
submitted by a retail electric supplier to the Sec-
retary, and
‘‘(3) the quantity of electricity sales of all retail
electric suppliers.
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‘‘(i) SUNSET.—This section expires December 31,
2015.’’.
(b) DEFINITIONS.—Section 3 of PURPA is amended
by adding after paragraph (24) as added by section 101
of this Act the following new paragraph:
‘‘(25) The term ‘retail electric supplier’ means
a person, State agency, or Federal agency that sells
electric energy to an electric consumer.
‘‘(26) The term ‘Indian land’ means (A) any
land within the limits of any Indian reservation,
pueblo or rancheria, (B) any land not within the lim-
its of any Indian reservation, pueblo or rancheria
title to which was on the date of passage of the
Comprehensive Electricity Competition Act either
held in trust by the United States for the benefit of
any Indian tribe or individual or held by any Indian
tribe or individual subject to restriction by the
United States against alienation, (C) any dependent
Indian community, and (D) any land conveyed to
any Alaska Native corporation under the Alaska Na-
tive Claims Settlement Act.
‘‘(27) The term ‘Indian tribe’ means any Indian
tribe, band, group, or nation, including Alaska Indi-
ans, Aleuts, or Eskimos, or any Alaskan Native Vil-
lage of the United States, which is considered an eli-
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gible recipient under the Indian Self Determination
and Education Assistance Act (Public Law 93–638)
or was considered an eligible recipient under chapter
67 of title 31, United States Code, prior to the re-
peal of such chapter.’’.
SEC. 403. NET METERING.
PURPA is amended by adding the following new sec-
tion after section 611 as added by section 402 of this Act:
‘‘SEC. 612. NET METERING FOR RENEWABLE ENERGY.
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) The term ‘eligible on-site generating facil-
ity’ means a facility on the site of an electric con-
sumer with a peak generating capacity of 20 kilo-
watts or less that is fueled solely by a renewable en-
ergy resource.
‘‘(2) The term ‘renewable energy resource’
means solar energy, wind, geothermal, or biomass.
‘‘(3) The term ‘net metering service’ means
service to an electric consumer under which elec-
tricity generated by that consumer from an eligible
on-site generating facility and delivered to the dis-
tribution system through the same meter through
which purchased electricity is received may be used
to offset electricity provided by the retail electric
supplier to the electric consumer during the applica-
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ble billing period so that an electric consumer is
billed only for the net electricity consumed during
the billing period, but in no event shall the net be
less than zero during the applicable billing period.
‘‘(b) REQUIREMENT TO PROVIDE NET METERING
SERVICE.—Each retail electric supplier shall make avail-
able upon request net metering service to any retail elec-
tric consumer whom the supplier currently serves or solic-
its for service.
‘‘(c) STATE AUTHORITY.—This section does not pre-
clude a State from imposing additional requirements con-
sistent with the requirements in this section, including the
imposition of a cap limiting the amount of net metering
available in the State. Nothing in this Act or any other
Federal law preempts or otherwise affects authority under
State law to require a retail electric supplier to make avail-
able net metering service to a retail electric consumer
whom the supplier serves or offers to serve.’’.
SEC. 404. REFORM OF SECTION 210 OF PURPA.
Section 210 of PURPA is amended by adding the fol-
lowing new subsection after subsection (l):
‘‘(m) REPEAL OF MANDATORY PURCHASE REQUIRE-
MENT.—After the date of enactment of the Comprehensive
Electricity Competition Act, an electric utility shall not be
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required to enter into a new contract or obligation to pur-
chase electric energy under this section.’’.
SEC. 405. INTERCONNECTIONS FOR CERTAIN FACILITIES.
PURPA is amended by adding the following new sec-
tion after section 612 as added by section 403 of this Act:
‘‘SEC. 613. INTERCONNECTIONS FOR CERTAIN FACILITIES.
‘‘(a) DEFINITION.—As used in this section ‘facility’
means—
‘‘(1) a small-scale electric power generation fa-
cility that is designed to serve customers at or near
the facility, or
‘‘(2) a facility using a single fuel source to
produce at the point of use either electric or me-
chanical power and thermal energy.
‘‘(b) INTERCONNECTION.—A distribution utility shall
allow a facility to interconnect with the distribution utility
if the facility owner is located in the distribution utility’s
service territory and complies with the final rule issued
under subsection (c).
‘‘(c) Within one year from the date of enactment of
this section, the Secretary shall issue a final rule to imple-
ment subsection (b) and issue related safety and power
quality standards. To the extent feasible, the Secretary
shall develop the standards through a process involving in-
terested parties.
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‘‘(d) The Commission shall enforce the rule estab-
lished under subsection (c) using its authority under this
Act.’’.
SEC. 406. RURAL AND REMOTE COMMUNITIES ELEC-
TRIFICATION GRANTS.
Section 313 of the Rural Electrification Act of 1936
(7 U.S.C. 940c) is amended by adding after subsection
(b) the following new subsections:
‘‘(c) RURAL
AND REMOTE COMMUNITIES ELEC-
TRIFICATION GRANTS.—The Secretary, in consultation
with the Secretary of Energy and the Secretary of the In-
terior, may provide grants to eligible borrowers under this
Act for the purpose of increasing energy efficiency, low-
ering, or stabilizing electric rates to end users, or pro-
viding or modernizing electric facilities for:
‘‘(1) a unit of local government of a State or
territory, or
‘‘(2) an Indian tribe
that has an average cost per kilowatt hour of electricity
that is at least 150 percent of the average retail price per
kilowatt hour for all consumers in the United States, as
determined by the Secretary using data provided by the
Department of Energy. The Secretary shall issue the
grants based on a determination of cost-effectiveness and
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most effective use of the funds to achieve the stated pur-
poses of this section.
‘‘(d) DEFINITION.—For purposes of this section, the
term ‘Indian tribe’ means any Indian tribe, band, group,
or nation, including Alaska Indians, Aleuts, or Eskimos,
or any Alaskan Native Village of the United States, which
is considered an eligible recipient under the Indian Self
Determination and Education Assistance Act (Public Law
93–638) or was considered an eligible recipient under
chapter 67 of title 31, United States Code, prior to the
repeal of such chapter.
‘‘(e) AUTHORIZATION.—There is authorized to be ap-
propriated for purposes of subsection (c) $20,000,000 for
each of the seven fiscal years following enactment of this
section.’’.
SEC. 407. INDIAN TRIBE ASSISTANCE.
Title XXVI of the Energy Policy Act of 1992 (25
U.S.C. 3501–3506) is amended by adding after section
2606 the following new section:
‘‘SEC. 2607. TRIBAL ELECTRICITY ASSISTANCE.
‘‘(a) The Secretary of Energy, in consultation with
the Secretary of the Interior and the Secretary of Agri-
culture, shall establish a program to assist an Indian tribe
to meet its electricity needs. Under the program, the Sec-
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retary shall provide, subject to appropriations, to an In-
dian tribe—
‘‘(1) technical assistance and grants to analyze
tribal electricity needs, the availability of natural re-
sources for tribal generation of electricity, the oppor-
tunities for the improvement of transmission of elec-
tricity to the tribe, and the effect on the tribe of re-
tail competition in the sale or transmission of elec-
tricity, and
‘‘(2) in an area that is not served or served in-
adequately by an electric utility, as defined in sec-
tion 3(4) of the Public Utility Regulatory Policies
Act of 1978, or distribution utility, as defined in sec-
tion 3(23) of the Public Utility Regulatory Policies
Act of 1978, grants to plan and construct or im-
prove facilities to generate, transmit, and distribute
electricity to serve tribal needs.
In exercising authority under this section, the Secretary
shall take into account the ability of entities with loans
made or guaranteed under the Rural Electrification Act
of 1936 to repay those loans. The Secretary shall issue
the grants based on a determination of cost-effectiveness
and most effective use of funds to achieve the stated pur-
poses of this section.
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‘‘(b) DEFINITION.—For purposes of this section, the
term ‘Indian tribe’ means any Indian tribe, band, group,
or nation, including Alaska Indians, Aleuts, or Eskimos,
or any Alaskan Native Village of the United States, which
is considered an eligible recipient under the Indian Self
Determination and Education Assistance Act (Public Law
93–638) or was considered an eligible recipient under
chapter 67 of title 31, United States Code, prior to the
repeal of such chapter.
‘‘(c) There are authorized to be appropriated to the
Department of Energy for each of the seven fiscal years
following enactment of this section, $5,000,000 to carry
out subsection (a)(1), and $15,000,000 to carry out sub-
section (a)(2).’’.
SEC. 408. OFFICE OF INDIAN ENERGY POLICY AND PRO-
GRAMS.
Title II of the Department of Energy Organization
Act is amended by adding the following new section after
section 212:
‘‘SEC. 213. OFFICE OF INDIAN ENERGY POLICY AND PRO-
GRAMS.
‘‘(a) The Secretary may establish within the Depart-
ment an Office of Indian Energy Policy and Programs.
The Office shall be headed by a Director appointed by the
Secretary.
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‘‘(b) Subject to the supervision of the Secretary, the
Office is authorized to establish a program to provide, di-
rect, foster, coordinate and implement energy, energy
management, and energy conservation programs to—
‘‘(1) promote tribal energy efficiency;
‘‘(2) modernize tribal electric infrastructure;
‘‘(3) preserve tribal sovereignty and self deter-
mination related to energy matters;
‘‘(4) lower or stabilize energy costs; and
‘‘(5) electrify tribal members’ homes.
‘‘(c) There are authorized to be appropriated such
sums as may be necessary to implement this section.’’.
SEC. 409. SOUTHEAST ALASKA ELECTRICAL POWER.
There are authorized to be appropriated to the De-
partment of Energy up to a total sum of $20,000,000 for
the purpose of providing financial assistance to the State
of Alaska as necessary to ensure the availability of ade-
quate electrical power to the greater Ketchikan area in
southeast Alaska, including the construction of an intertie.
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TITLE 
V—REGULATION 
OF
MERGERS AND CORPORATE
STRUCTURE
SEC. 501. REFORM OF HOLDING COMPANY REGULATION
UNDER PUHCA.
Effective 18 months after the enactment of this Act,
the Public Utility Holding Company Act of 1935 is re-
pealed and the following is enacted in its place:
‘‘SECTION 1. SHORT TITLE.
‘‘This Act may be cited as the ‘Public Utility Holding
Company Act of 1999’.
‘‘SEC. 2. DEFINITIONS.
‘‘For purposes of this Act—
‘‘(1) the term ‘affiliate’ of a company means
any company 5 percent or more of the outstanding
voting securities of which are owned, controlled, or
held with power to vote, directly or indirectly, by
such company;
‘‘(2) the term ‘associate company’ of a company
means any company in the same holding company
system with such company;
‘‘(3) the term ‘Commission’ means the Federal
Energy Regulatory Commission;
‘‘(4) the term ‘company’ means a corporation,
partnership, association, joint stock company, busi-
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ness trust, or any organized group of persons,
whether incorporated or not, or a receiver, trustee,
or other liquidating agent of any of the foregoing;
‘‘(5) the term ‘electric utility company’ means
any company that owns or operates facilities used
for the generation, transmission, or distribution of
electric energy for sale;
‘‘(6) the terms ‘exempt wholesale generator’
and ‘foreign utility company’ have the same mean-
ings as in sections 32 and 33, respectively, of the
Public Utility Holding Company Act of 1935, as
those sections existed on the day before the effective
date of this Act;
‘‘(7) the term ‘gas utility company’ means any
company that owns or operates facilities used for
distribution at retail (other than the distribution
only in enclosed portable containers, or distribution
to tenants or employees of the company operating
such facilities for their own use and not for resale)
of natural or manufactured gas for heat, light, or
power;
‘‘(8) the term ‘holding company’ means—
‘‘(A) any company that directly or indi-
rectly owns, controls, or holds, with power to
vote, 10 percent or more of the outstanding vot-
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ing securities of a public utility company or of
a holding company of any public utility com-
pany; and
‘‘(B) any person, determined by the Com-
mission, after notice and opportunity for hear-
ing, to exercise directly or indirectly (either
alone or pursuant to an arrangement or under-
standing with one or more persons) such a con-
trolling influence over the management or poli-
cies of any public utility company or holding
company as to make it necessary or appropriate
for the rate protection of utility customers with
respect to rates that such person be subject to
the obligations, duties, and liabilities imposed
by this Act upon holding companies;
‘‘(9) the term ‘holding company system’ means
a holding company, together with its subsidiary com-
panies;
‘‘(10) the term ‘jurisdictional rates’ means
rates established by the Commission for the trans-
mission of electric energy, the sale of electric energy
at wholesale in interstate commerce, the transpor-
tation of natural gas, and the sale in interstate com-
merce of natural gas for resale for ultimate public
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consumption for domestic, commercial, industrial, or
any other use;
‘‘(11) the term ‘natural gas company’ means a
person engaged in the transportation of natural gas
in interstate commerce or the sale of such gas in
interstate commerce for resale;
‘‘(12) the term ‘person’ means an individual or
company;
‘‘(13) the term ‘public utility’ means any person
who owns or operates facilities used for transmission
of electric energy or sales of electric energy at whole-
sale in interstate commerce;
‘‘(14) the term ‘public utility company’ means
an electric utility company or a gas utility company;
‘‘(15) the term ‘State commission’ means any
commission, board, agency, or officer, by whatever
name designated, of a State, municipality, or other
political subdivision of a State that, under the laws
of such State, has jurisdiction to regulate public util-
ity companies;
‘‘(16) the term ‘subsidiary company’ of a hold-
ing company means—
‘‘(A) any company, 10 percent or more of
the outstanding voting securities of which are
directly or indirectly owned, controlled, or held
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with power to vote, by such holding company;
and
‘‘(B) any person, the management or poli-
cies of which the Commission, after notice and
opportunity for hearing, determines to be sub-
ject to a controlling influence, directly or indi-
rectly, by such holding company (either alone or
pursuant to an arrangement or understanding
with one or more other persons) so as to make
it necessary for the rate protection of utility
customers with respect to rates that such per-
son be subject to the obligations, duties, and li-
abilities imposed by this Act upon subsidiary
companies of holding companies; and
‘‘(17) the term ‘voting security’ means any se-
curity presently entitling the owner or holder thereof
to vote in the direction or management of the affairs
of a company.
‘‘SEC. 3. FEDERAL ACCESS TO BOOKS AND RECORDS.
‘‘(a) IN GENERAL.—Each holding company and each
associate company thereof shall maintain, and shall make
available to the Commission, such books, accounts,
records, memoranda, and other records as the Commission
deems to be relevant to costs incurred by a public utility
or natural gas company that is an associate company of
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such holding company and necessary or appropriate for
the protection of utility customers with respect to jurisdic-
tional rates for the transmission of electric energy, the sale
of electric energy at wholesale in interstate commerce, the
transportation of natural gas in interstate commerce, and
the sale in interstate commerce of natural gas for resale
for ultimate public consumption for domestic, commercial,
industrial, or any other use.
‘‘(b) AFFILIATE COMPANIES.—Each affiliate of a
holding company or of any subsidiary company of a hold-
ing company shall maintain, and make available to the
Commission, such books, accounts, memoranda, and other
records with respect to any transaction with another affil-
iate, as the Commission deems relevant to costs incurred
by a public utility or natural gas company that is an asso-
ciate company of such holding company and necessary or
appropriate for the protection of utility customers with re-
spect to jurisdictional rates.
‘‘(c) HOLDING COMPANY SYSTEMS.—The Commis-
sion may examine the books, accounts, memoranda, and
other records of any company in a holding company sys-
tem, or any affiliate thereof, as the Commission deems rel-
evant to costs incurred by a public utility or natural gas
company within such holding company system and nec-
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essary or appropriate for the protection of utility cus-
tomers with respect to jurisdictional rates.
‘‘(d) CONFIDENTIALITY.—No member, officer, or em-
ployee of the Commission shall divulge any fact or infor-
mation that may come to his or her knowledge during the
course of examination of books, accounts, memoranda, or
other records as provided in this section, except as may
be directed by the Commission or by a court of competent
jurisdiction.
‘‘SEC. 4. STATE ACCESS TO BOOKS AND RECORDS.
‘‘(a) IN GENERAL.—Upon the written request of a
State commission having jurisdiction to regulate a public
utility company in a holding company system, the holding
company or any associate company or affiliate thereof,
other than such public utility company, wherever located,
shall produce for inspection such books, accounts, memo-
randa, and other records that—
‘‘(1) have been identified in reasonable detail in
a proceeding before the State commission;
‘‘(2) the State commission deems are relevant
to costs incurred by such public utility company; and
‘‘(3) are necessary for the effective discharge of
the responsibilities of the State commission with re-
spect to such proceeding.
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‘‘(b) LIMITATION.—Subsection (a) does not apply to
any person that is a holding company solely by reason of
ownership of one or more qualifying facilities under the
Public Utility Regulatory Policies Act of 1978.
‘‘(c) CONFIDENTIALITY OF INFORMATION.—The pro-
duction of books, accounts, memoranda, and other records
under subsection (a) shall be subject to such terms and
conditions as may be necessary and appropriate to safe-
guard against unwarranted disclosure to the public of any
trade secrets or sensitive commercial information.
‘‘(d) EFFECT ON STATE LAW.—Nothing in this sec-
tion shall preempt applicable State law concerning the pro-
vision of books, records, or any other information, or in
any way limit the rights of any State to obtain books,
records, or any other information under any other Federal
law, contract, or otherwise.
‘‘(e) COURT JURISDICTION.—Any United States dis-
trict court located in the State in which the State commis-
sion referred to in subsection (a) is located shall have ju-
risdiction to enforce compliance with this section.
‘‘SEC. 5. EXEMPTION AUTHORITY.
‘‘(a) RULEMAKING.—Not later than 90 days after the
effective date of this Act, the Commission shall promul-
gate a final rule to exempt from the requirements of sec-
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tion 3 any person that is a holding company, solely with
respect to one or more—
‘‘(1) qualifying facilities under the Public Util-
ity Regulatory Policies Act of 1978;
‘‘(2) exempt wholesale generators; or
‘‘(3) foreign utility companies.
‘‘(b) OTHER AUTHORITY.—If, upon application or
upon its own motion, the Commission finds that the books,
records, accounts, memoranda, and other records of any
person are not relevant to the jurisdictional rates of a pub-
lic utility or natural gas company, or if the Commission
finds that any class of transactions is not relevant to the
jurisdictional rates of a public utility or natural gas com-
pany, the Commission shall exempt such person or trans-
action from the requirements of section 3.
‘‘SEC. 6. AFFILIATE TRANSACTIONS.
‘‘Nothing in this Act shall preclude the Commission
or a State commission from exercising its jurisdiction
under otherwise applicable law to determine whether a
public utility company, public utility, or natural gas com-
pany may recover in rates any costs of an activity per-
formed by an associate company, or any costs of goods
or services acquired by such public utility company from
an associate company.
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‘‘SEC. 7. APPLICABILITY.
‘‘No provision of this Act shall apply to, or be deemed
to include—
‘‘(1) the United States;
‘‘(2) a State or any political subdivision of a
State;
‘‘(3) any foreign governmental authority not op-
erating in the United States;
‘‘(4) any agency, authority, or instrumentality
of any entity referred to in paragraph (1), (2), or
(3); or
‘‘(5) any officer, agent, or employee of any enti-
ty referred to in paragraph (1), (2), or (3) acting as
such in the course of official duty.
‘‘SEC. 8. EFFECT ON OTHER REGULATIONS.
‘‘Nothing in this Act precludes the Commission or a
State commission from exercising its jurisdiction under
otherwise applicable law to protect utility customers.
‘‘SEC. 9. ENFORCEMENT.
‘‘The Commission shall have the same powers as set
forth in sections 306 through 317 of the Federal Power
Act (16 U.S.C. 825d–825p) to enforce the provisions of
this Act.
‘‘SEC. 10. SAVINGS PROVISIONS.
‘‘(a) IN GENERAL.—Nothing in this Act prohibits a
person from engaging in or continuing to engage in activi-
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ties or transactions in which it is legally engaged or au-
thorized to engage on the effective date of this Act.
‘‘(b) EFFECT ON OTHER COMMISSION AUTHORITY.—
Nothing in this Act limits the authority of the Commission
under the Federal Power Act (16 U.S.C. 791a et seq.)
(including section 301 of that Act) or the Natural Gas
Act (15 U.S.C. 717 et seq.) (including section 8 of that
Act).
‘‘SEC. 11. IMPLEMENTATION.
‘‘Not later than 18 months after the date of enact-
ment of the Comprehensive Electricity Competition Act,
the Commission shall—
‘‘(1) promulgate such regulations as may be
necessary or appropriate to implement this Act
(other than section 4); and
‘‘(2) submit to the Congress detailed rec-
ommendations on technical and conforming amend-
ments to Federal law necessary to carry out this Act
and the amendments made by this Act.
‘‘SEC. 12. TRANSFER OF RESOURCES.
‘‘All books and records that relate primarily to the
functions transferred to the Commission under this Act
shall be transferred from the Securities and Exchange
Commission to the Commission.
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‘‘SEC. 13. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated such funds
as may be necessary to carry out this Act.
‘‘SEC. 14. CONFORMING AMENDMENT TO THE FEDERAL
POWER ACT.
‘‘Section 318 of the Federal Power Act (16 U.S.C.
825q) is repealed.’’.
SEC. 502. ELECTRIC COMPANY MERGERS.
Section 203(c) of the FPA is amended by—
(1) striking ‘‘public utility’’ each time it ap-
pears and inserting in its place ‘‘person or electric
utility company’’;
(2) inserting after the first sentence the fol-
lowing: ‘‘Except as the Commission otherwise pro-
vides, a holding company in a holding company sys-
tem that includes an electric utility company shall
not, directly or indirectly, purchase, acquire, or take
any security of an electric utility company or of a
holding company in a holding company system that
includes an electric utility company, with first secur-
ing an order of the Commission authorizing it to do
so.’’;
(3) striking ‘‘hearing’’ in the last sentence and
inserting ‘‘oral or written presentation of views’’;
(4) adding after ‘‘public interest’’ the following:
‘‘including consideration of the effects on competi-
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tion in wholesale and retail electricity markets,’’;
and
(5) adding at the end the following: ‘‘For pur-
poses of this subsection, the terms ‘electric utility
company’, ‘holding company’, and ‘holding company
system’ have the meaning given them in the Public
Utility Holding Company Act of 1999.
Notwithstanding section 201(b)(1), generation facilities
are subject to the jurisdiction of the Commission for pur-
poses of this section, except as the Commission otherwise
may provide, provided that an entity that has existing
loans made or guaranteed under the Rural Electrification
Act of 1936 (5 U.S.C. 901 et seq.) is not jurisdictional
for purposes of this section.’’.
SEC. 503. REMEDIAL MEASURES FOR MARKET POWER.
The FPA is amended by adding the following new
section after section 216 as added by section 303 of this
Act:
‘‘REMEDIAL MEASURES FOR MARKET POWER
‘‘SEC. 217. (a) DEFINITIONS.—As used in this
section—
‘‘(1) ‘market power’ means the ability of a pub-
lic utility or electric utility profitably to maintain
prices above competitive levels for a significant pe-
riod of time, and
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‘‘(2) ‘notice of retail competition’ has the mean-
ing provided under section 3(22) of the Public Util-
ity Regulatory Policies Act of 1978.
‘‘(b) COMMISSION JURISDICTIONAL SALES.—(1) If
the Commission determines that there are markets in
which a public utility that owns or controls generation fa-
cilities has market power in sales of electric energy for
resale in interstate commerce, the Commission shall order
that utility to submit a plan for taking necessary actions
to remedy its market power, which may include, but is
not limited to, conditions respecting operation or dispatch
of generation, independent operation of transmission fa-
cilities, or divestiture of ownership of one or more genera-
tion facilities.
‘‘(2) in consultation with the Attorney General and
the Federal Trade Commission, the Commission shall re-
view the plan to determine if its implementation would
adequately mitigate the adverse competitive effects of
market power. The Commission may approve the plan
with or without modification. The plan takes effect upon
approval by the Commission. Notwithstanding any State
law, regulation, or order to the contrary and notwith-
standing any other provision of this Act or any other law,
the Commission has jurisdiction to order divestiture or
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other transfer of control of generation assets pursuant to
the plan.
‘‘(c) STATE JURISDICTIONAL SALES.—(1) If a State
commission that has filed a notice of retail competition
has reason to believe that an electric utility doing business
in the State has market power, the State commission may
apply for an order under this section.
‘‘(2) If, after receipt of such an application and after
notice and opportunity for a hearing, the Commission de-
termines that the electric utility has market power in the
sales of electric energy sold at retail in the State, this mar-
ket power would adversely affect competition in the State,
and the State commission lacks authority to effectively
remedy such market power, the Commission may order the
electric utility to submit a plan for taking necessary ac-
tions to remedy the electric utility’s market power. These
actions may include conditions respecting operation or dis-
patch of generation, competitive procurement of all gen-
eration capacity or energy, independent operation of trans-
mission facilities, or divestiture of ownership of one or
more generation facilities of the electric utility.
‘‘(3) After consultation with the Attorney General
and the Federal Trade Commission, the Commission may
approve the plan with or without modification. The plan
shall take effect upon approval by the Commission.
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‘‘(4) Notwithstanding any State law, regulation, or
order to the contrary and notwithstanding any other provi-
sion of this Act or any other law, the Commission has ju-
risdiction to order divestiture or other transfer of control
of generation assets pursuant to the plan.’’.
TITLE VI—ELECTRIC
RELIABILITY
SEC. 601. ELECTRIC RELIABILITY ORGANIZATION AND
OVERSIGHT.
(a) ELECTRIC
RELIABILITY
ORGANIZATION
AND
OVERSIGHT.—The Federal Power Act is amended by add-
ing the following new section after section 217:
‘‘ELECTRIC RELIABILITY ORGANIZATION AND OVERSIGHT
‘‘SEC. 218. (a) PURPOSE.—The purpose of this sec-
tion is to provide for the establishment and enforcement
of mandatory reliability standards in order to ensure the
reliable operation of the bulk-power system.
‘‘(b) DEFINITIONS.—As used in this section:
‘‘(1) The term ‘Affiliated Regional Reliability
Entity’ means an entity delegated authority under
the provisions of subsection (i).
‘‘(2) The term ‘Bulk-Power System’ means all
facilities and control systems necessary for operating
an interconnected transmission grid (or any portion
thereof), including high-voltage transmission lines,
substations, control centers, communications, data,
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and operations planning facilities, and the output of
generating units necessary to maintain transmission
system reliability.
‘‘(3) The term ‘Electric Reliability Organiza-
tion’ or ‘Organization’ means the organization ap-
proved by the Commission under subsection (e)(4).
‘‘(4) The term ‘Entity Rule’ means a rule
adopted by an Affiliated Regional Reliability Entity
for a specific region and designed to implement or
enforce one or more Organization Standards. An
Entity Rule shall be subject to approval by the Or-
ganization, and once approved, shall be treated as
an Organization Standard.
‘‘(5) The term ‘Industry Sector’ means a group
of Users of the Bulk Power System with substan-
tially similar commercial interests, as determined by
the board of the Electric Reliability Organization.
‘‘(6) The term ‘Interconnection’ means a geo-
graphic area in which the operation of Bulk-Power
System components is synchronized such that the
failure of one or more of such components may ad-
versely affect the ability of the operators of other
components within the Interconnection to maintain
safe and reliable operation of the facilities within
their control.
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‘‘(7) The term ‘Organization Standard’ means a
policy or standard duly adopted by the Electric Reli-
ability Organization to provide for the reliable oper-
ation of a Bulk-Power System.
‘‘(8) The term ‘Public Interest Group’ means
any non-profit private or public organization that
has an interest in the activities of the Electric Reli-
ability Organization, including, but not limited to,
ratepayer advocates, environmental groups, and
State and local government organizations that regu-
late market participants and promulgate government
policy.
‘‘(9) The term ‘Variance’ means an exception or
variance from the requirements of an Organization
Standard (including a proposal for an Organization
standard where there is no Organization Standard)
that is adopted by an Affiliated Regional Reliability
Entity and applicable to all or a part of the region
for which the Affiliated Regional Reliability Entity is
responsible. A Variance shall be subject to approval
by the Organization, and once approved, shall be
treated as an Organization Standard.
‘‘(10) The term ‘System Operator’ means any
entity that operates or is responsible for the oper-
ation of a Bulk-Power System, including but not
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limited to a control area operator, an independent
system operator, a transmission company, a trans-
mission system operator, or a regional security coor-
dinator.
‘‘(11) The term ‘User of the Bulk-Power Sys-
tem’ means any entity that sells, purchases, or
transmits electric power over a Bulk-Power System,
or that owns, operates or maintains facilities or con-
trol systems that are part of a Bulk-Power System,
or that is a System Operator.
‘‘(c) 
COMMISSION
AUTHORITY.—Notwithstanding
any other provision of the Federal Power Act, within the
United States the Commission has jurisdiction over the
Electric Reliability Organization, all Affiliated Regional
Reliability Entities, all System Operators, and all Users
of the Bulk-Power System, for purposes of approving and
enforcing compliance with the requirements of this section.
‘‘(d) EXISTING
RELIABILITY
STANDARDS.—Fol-
lowing enactment of this section, and prior to the approval
of an Organization under subsection (e), any person, in-
cluding the North American Electric Reliability Council
and its member Regional Reliability Councils, may file
with the Commission any reliability standard, guidance,
or practice, or any amendment thereto, that the person
would propose to be made mandatory and enforceable. The
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Commission, after allowing interested persons an oppor-
tunity to submit comments, may approve the proposed
mandatory standard, guidance, or practice, or any amend-
ment thereto, if it finds that the standard, guidance, or
practice, or amendment is just, reasonable, not unduly dis-
criminatory or preferential, and in the public interest.
Filed standards, guidance, or practices, including any
amendments thereto, shall be mandatory and applicable
according to their terms following approval by the Com-
mission and shall remain in effect until—
‘‘(1) withdrawn, disapproval or superseded by
an Organization Standard, issued or approved by the
Electric Reliability Organization and made effective
by the Commission under section (f); or
‘‘(2) disapproved or suspended by the Commis-
sion if, upon complaint or upon its own motion and
after notice and an opportunity for comment, the
Commission finds the standard, guidance, or prac-
tice unjust, unreasonable, unduly discriminatory or
preferential, or not in the public interest.
Standards, guidance, or practices in effect pursuant to the
provisions of this subsection shall be enforceable by the
Commission under Part III of this Act.
‘‘(e) ORGANIZATION APPROVAL.—(1) Not later than
90 days after the date of enactment of this section, the
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Commission shall issue proposed rules specifying proce-
dures and requirements for an entity to apply for approval
as the Electric Reliability Organization. The Commission
shall provide notice and opportunity for comment on the
proposed rules. The Commission shall issue a final rule
under this subsection within 180 days after the date of
enactment of this section.
‘‘(2) Following the issuance of a final Commission
rule under paragraph (1), an entity may submit an appli-
cation to the Commission for approval as the Electric Reli-
ability Organization. The applicant shall specify in its ap-
plication its governance and procedures, as well as its
funding mechanism and initial funding requirements.
‘‘(3) The Commission shall provide public notice of
the application and afford interested parties an oppor-
tunity to comment.
‘‘(4) The Commission shall approve the application
if the Commission determines that the applicant—
‘‘(A) has the ability to develop, implement, and
enforce standards that provide for an adequate level
of reliability of the Bulk-Power System;
‘‘(B) permits voluntary membership to any
User of the Bulk-Power System or Public Interest
Group;
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‘‘(C) assures fair representation of its members
in the selection of its directors and fair management
of its affairs, taking into account the need for effi-
ciency and effectiveness in decisionmaking and oper-
ation and requirements for technical competency in
the development of Organization Standards and the
exercise of oversight of Bulk-Power System reli-
ability;
‘‘(D) assures that no two Industry Sectors have
the ability to control, and no one Industry Sector
has the ability to veto, the Electric Reliability Orga-
nization’s discharge of its responsibilities (including
actions by committees recommending standards to
the board or other board actions to implement and
enforce standards);
‘‘(E) provides for governance by a board of no
more than eleven members, one of whom shall be ap-
pointed by the Secretary of Energy;
‘‘(F) provides a funding mechanism and re-
quirements that are just, reasonable, and not unduly
discriminatory or preferential and are in the public
interest, and which satisfies the requirements of sub-
section (n);
‘‘(G) establishes procedures for development of
Organization Standards that provide reasonable no-
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tice and opportunity for public comment, taking into
account the need for efficiency and effectiveness in
decisionmaking and operations and the requirements
for technical competency in the development of Or-
ganization Standards, and which standards develop-
ment process has the following attributes: (i) open-
ness, (ii) balance of interests, and (iii) due process,
except that the procedures may include alternative
procedures for emergencies;
‘‘(H) establishes fair and impartial procedures
for implementation and enforcement of Organization
Standards, either directly or through delegation to
an Affiliated Regional Reliability Entity, including
the imposition of penalties, limitations on activities,
functions, or operations, or other appropriate sanc-
tions;
‘‘(I) establishes procedures for notice and op-
portunity for public observation of all meetings, ex-
cept that the procedures for public observation may
include alternative procedures for emergencies or for
the discussion of information the directors determine
should take place in closed session, such as litiga-
tion, personnel actions, or commercially sensitive in-
formation;
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‘‘(J) provides for the consideration of rec-
ommendations of States and State commissions; and
‘‘(K) addresses other matters that the Commis-
sion may deem necessary or appropriate to ensure
that the procedures, governances, and funding of the
Electric Reliability Organization are just, reason-
able, not unduly discriminatory or preferential, and
are in the public interest.
‘‘(5) The Commission shall approve only one Electric
Reliability Organization. If the Commission receives two
or more timely applications that satisfy the requirements
of this subsection, the Commission shall approve only the
application it concludes will best implement the provisions
of this section.
‘‘(f) ESTABLISHMENT OF AND MODIFICATIONS OF
ORGANIZATION STANDARDS.—(1) The Electric Reliability
Organization shall file with the Commission any new or
modified Organization Standards, including any Variances
or Entity Rules, and the Commission shall follow the pro-
cedures under paragraph (2) for review of that filing. Sub-
missions shall include:
‘‘(A) a concise statement of the purpose of the
proposal, and
‘‘(B) a record of any proceedings conducted
with respect to the proposal.
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‘‘(2) The Commission shall provide notice of the filing
of the proposal and afford interested persons a reasonable
time, but not more than 30 days, to submit comments.
The Commission, after taking into consideration any sub-
mitted comments, shall approve or disapprove the proposal
not later than 60 days after the deadline for the submis-
sion of comments except that—
‘‘(A) the Commission may extend the 60-day
period for an additional 90 days for good cause, and
‘‘(B) if the Commission does not act to approve
or disapprove a proposal within the periods set forth
in this paragraph, the proposal shall go into effect,
without prejudice to the authority of the Commission
thereafter to suspend or modify the proposal in ac-
cordance with the standards and requirements of
this section.
Proposals approved by the Commission take effect accord-
ing to their terms but not earlier than 30 days after the
effective date of the Commission’s order, except as pro-
vided in paragraph (3).
‘‘(3)(A) In the exercise of its review responsibilities
under this subsection, the Commission shall give due
weight to the technical expertise of the Electric Reliability
Organization with respect to the content of a new or modi-
fied Organization Standard, but shall not defer to the Or-
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ganization with respect to the effect of the standard on
competition. The Commission shall approve a proposed
new or modified Organization Standard if it determines
the proposal to be just, reasonable, not unduly discrimina-
tory or preferential, and in the public interest.
‘‘(B) The Commission, either upon complaint or upon
its own motion, shall suspend an existing Organization
Standard, if it determines the standard to be unjust, un-
reasonable, unduly discriminatory or preferential, or not
in the public interest.
‘‘(C) An existing or proposed Organization Standard
which is disapproved or suspended in whole or in part by
the Commission shall be remanded to the Electric Reli-
ability Organization for further consideration.
‘‘(D) The Commission, on its own motion or upon
complaint, may direct the Electric Reliability Organization
to develop an Organization Standard, including modifica-
tion to an existing Organization Standard, addressing a
specific matter by a date certain if the Commission con-
siders a new or modified Organization Standard necessary
or appropriate to further the purposes of this section. The
Electric Reliability Organization shall file any new or
modified Organization Standard in accordance with this
subsection.
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‘‘(E) An Affiliated Regional Reliability Entity may
propose a Variance or Entity Rule to the Electric Reli-
ability Organization under subsection (i)(3). The Affili-
ated Regional Reliability Entity may request that the
Electric Reliability Organization expedite consideration of
the proposal, and may file a notice of this request with
the Commission, if expedited consideration is necessary to
provide for Bulk-Power System reliability. If the Electric
Reliability Organization fails to adopt the Variance or En-
tity Rule, either in whole or in part, the Affiliated Re-
gional Reliability Entity may request that the Commission
review such action. If the Commission determines, after
its review of such a request, that the action of the Electric
Reliability Organization did not conform to the applicable
standards and procedures approved by the Commission,
or if the Commission determines that the Variance or En-
tity Rule is just, reasonable, not unduly discriminatory or
preferential, and in the public interest, and that the Elec-
tric Reliability Organization has unreasonably rejected the
proposed Variance or Entity Rule, the Commission may
remand the proposed Variance or Entity Rule for further
consideration by the Electric Reliability Organization or
may direct the Electric Reliability Organization or the Af-
filiated Regional Reliability Entity to develop a Variance
or Entity Rule consistent with that requested by the Affili-
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ated Regional Reliability Entity. Such a Variance or Enti-
ty Rule proposed by an Affiliated Regional Reliability En-
tity shall be submitted to the Electric Reliability Organiza-
tion for review and filing with the Commission in accord-
ance with the procedures specified in this subsection.
‘‘(F) Notwithstanding any other provision of this sub-
section, a proposed Organization Standard or amendment
shall take effect according to its terms if the Electric Reli-
ability Organization determines that an emergency exists
requiring that the proposed Organization Standard or
amendment take effect without notice or comment. The
Electric Reliability Organization shall notify the Commis-
sion immediately following this determination and shall
file the emergency Organization Standard or amendment
with the Commission not later than five days following the
determination and shall include in the filing an expla-
nation of the need for the emergency standard. Subse-
quently, the Commission shall provide notice of the emer-
gency Organization Standard or amendment for comment,
and shall follow the procedures set out in paragraphs (2)
and (3) for review of a new or modified Organization
Standard. An emergency Organization Standard that has
gone into effect shall remain in effect unless and until sus-
pended or disapproved by the Commission. If the Commis-
sion determines at any time that the emergency Organiza-
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tion Standard or amendment is not necessary, the Com-
mission may suspend the emergency Organization Stand-
ard or amendment.
‘‘(4) All Users of the Bulk-Power System shall com-
ply with any Organization Standard that takes effect
under this section.
‘‘(g) COORDINATION WITH CANADA AND MEXICO.—
The Electric Reliability Organization shall take all appro-
priate steps to gain recognition in Canada and Mexico.
Subject to the President’s authority with respect to for-
eign policy, the United States shall use its best efforts to
enter into international agreements with the appropriate
governments of Canada and Mexico to provide for effective
compliance with Organization Standards and to provide
for the effectiveness of the Electric Reliability Organiza-
tion in carrying out its mission and responsibilities. All
actions taken by the Electric Reliability Organization, any
Affiliated Regional Reliability Entity, and the Commission
shall be consistent with the provisions of such inter-
national agreements.
‘‘(h) CHANGES IN PROCEDURES, GOVERNANCE, OR
FUNDING.—(1) The Electric Reliability Organization shall
file with the Commission any proposed change in its proce-
dures, governance, or funding, or any changes in the Af-
filiated Regional Reliability Entity’s procedures, govern-
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ance or funding relating to delegated functions, and shall
include with the filing an explanation of the basis and pur-
pose for the change.
‘‘(2) A proposed procedural change may take effect
90 days after filing with Commission if the change con-
stitutes a statement of policy, practice, or interpretation
with respect to the meaning or enforcement of an existing
procedure. Any other proposed procedural change takes ef-
fect only upon a finding by the Commission, after notice
and opportunity for comments, that the change is just,
reasonable, not unduly discriminatory or preferential, is
in the public interest, and satisfies the requirements of
subsection (e)(4).
‘‘(3) A change in governance or funding does not take
effect unless the Commission finds that the change is just,
reasonable, not unduly discriminatory or preferential, and
is in the public interest, and satisfies the requirements of
subsection (e)(4).
‘‘(4)(A) The Commission, either upon complaint or
upon its own motion, may suspend a procedure or govern-
ance or funding provision if it determines the procedure
or provision does not meet the requirements of subsection
(e)(4) or is unjust, unreasonable, unduly discriminatory
or preferential, or otherwise not in the public interest.
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‘‘(B) The Commission, upon complaint or upon its
own motion, may require the Electric Reliability Organiza-
tion to amend the procedures, governance or funding if
the Commission determines that the amendment is nec-
essary to meet the requirements of this section. The Elec-
tric Reliability Organization shall file the amendment in
accordance with paragraph (1) of this subsection.
‘‘(i) DELEGATIONS OF AUTHORITY.—(1) The Elec-
tric Reliability Organization shall, upon request by an en-
tity, enter into an agreement with the entity for the dele-
gation of authority to implement and enforce compliance
with Organization Standards approved by the Commission
in a specified geographic area if the Organization finds
that the entity requesting the delegation satisfies the re-
quirements of subsections (e)(4) (A), (B), (C), (D), (F),
and (K), and if the delegation promotes the effective and
efficient implementation and administration of Bulk-
Power System reliability The Electric Reliability Organi-
zation may enter into an agreement to delegate to the enti-
ty any other authority, except that the Electric Reliability
Organization shall reserve the right to set and approve
standards for the Bulk-Power System reliability.
‘‘(2) The Electric Reliability Organization shall file
with the Commission any agreement entered into under
this subsection and any information the Commission re-
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quires with respect to the Affiliated Regional Reliability
Entity to which authority is to be delegated. The Commis-
sion shall approve the agreement, following public notice
and an opportunity for comment, if it finds that the agree-
ment meets the requirements of paragraph (1), and is
just, reasonable, not unduly discriminatory or preferential,
and is in the public interest. A proposed delegation agree-
ment with an Affiliated Regional Reliability Entity orga-
nized on an Interconnection-wide basis shall be rebuttably
presumed by the Commission to promote the effective and
efficient implementation and administration of Bulk-
Power System reliability. No delegation by the Electric
Reliability Organization shall be valid unless approved by
the Commission.
‘‘(3)(A) A delegation agreement entered into under
this subsection shall specify the procedures for an Affili-
ated Regional Reliability Entity to propose Entity Rules
or Variances for review by the Electric Reliability Organi-
zation.
‘‘(B) With respect to any such proposal that would
apply on an Interconnection-wide basis, the Electric Reli-
ability Organization shall presume the proposal valid if
made by an Interconnection-wide Affiliated Regional Reli-
ability Entity unless the Electric Reliability Organization
makes a written finding that the proposal—
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‘‘(i) was not developed in a fair and open proc-
ess that provided an opportunity for all interested
parties to participate;
‘‘(ii) has a significant adverse impact on reli-
ability or commerce in other Interconnections;
‘‘(iii) fails to provide a level of reliability of the
Bulk-Power System within the Interconnection such
that it would constitute a serious and substantial
threat to public health, safety, welfare, or national
security; or
‘‘(iv) creates a serious and substantial burden
on competitive markets within the Interconnection
that is not necessary for reliability.
‘‘(C) With respect to a proposal that would apply only
to part of an Interconnection, the Electric Reliability Or-
ganization shall find the proposal valid if the Affiliated
Regional Reliability Entity or Entities making the pro-
posal demonstrate that it—
‘‘(i) was developed in a fair and open process
that provided an opportunity for all interested par-
ties to participate;
‘‘(ii) would not have an adverse impact on com-
merce that is not necessary for reliability;
‘‘(iii) provides a level of Bulk-Power System re-
liability adequate to protect public health, safety,
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welfare, and national security, and would not have
a significant adverse impact on reliability; and
‘‘(iv) in the case of a Variance, is based on le-
gitimate differences between regions or between sub-
regions within the Affiliated Regional Reliability En-
tity’s geographic area.
‘‘(D) The Electric Reliability Organization shall ap-
prove or disapprove the proposal within 120 days, or the
proposal is deemed approved. Following approval of a pro-
posal under this paragraph, the Electric Reliability Orga-
nization shall seek Commission approval pursuant to sub-
section (f). Affiliated Regional Reliability Entities may not
make requests for approval directly to the Commission ex-
cept pursuant to subsection (f)(3)(E).
‘‘(4) If an Affiliated Regional Reliability Entity re-
quests, consistent with paragraph (1) of this subsection,
that the Electric Reliability Organization delegate author-
ity to it, but is unable within 180 days to reach agreement
with the Electric Reliability Organization with respect to
the requested delegation, the entity may seek relief from
the Commission. If, following notice and opportunity for
comment, the Commission determines that the delegation
to the entity would meet the requirements of paragraph
(1); that the delegation would be just, reasonable, not un-
duly discriminatory or preferential, and in the public inter-
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est; and that the Electric Reliability Organization has un-
reasonably withheld the delegation, the Commission may,
by order, direct the Electric Reliability Organization to
make the delegation.
‘‘(5)(A) The Commission may, upon its own motion
or upon complaint, and with notice to the appropriate Af-
filiated Regional Reliability Entity or Entities, direct the
Electric Reliability Organization to propose a modification
to an agreement entered into under this subsection if the
Commission determines that—
‘‘(i) the Affiliated Regional Reliability Entity no
longer has the capacity to carry out effectively or ef-
ficiently its implementation or enforcement respon-
sibilities under that agreement, has failed to meet its
obligations under that agreement, or has violated
any provision of this section,
‘‘(ii) the rules, practices, or procedures of the
Affiliated Regional Reliability Entity no longer pro-
vide for fair and impartial discharge of its imple-
mentation or enforcement responsibilities under the
agreement,
‘‘(iii) the geographic boundary of a transmission
entity approved by the Commission is not wholly
within the boundary of an Affiliated Regional Reli-
ability Entity and such difference is inconsistent
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with the effective and efficient implementation and
administration of Bulk-Power System reliability, or
‘‘(iv) the agreement is inconsistent with another
delegation agreement as a result of actions taken
under paragraph (4) of this subsection.
‘‘(B) Following an order of the Commission issued
under paragraph (5)(A) of this subsection, the Commis-
sion may suspend the affected agreement if the Electric
Reliability Organization or the Affiliated Regional Reli-
ability Entity does not propose an appropriate and timely
modification. If the agreement is suspended, the Electric
Reliability Organization shall assume the previously dele-
gated responsibilities. The Commission shall allow the
Electric Reliability Organization and the Affiliated Re-
gional Reliability Entity an opportunity to appeal the sus-
pension.
‘‘(j) ORGANIZATION MEMBERSHIP.—Every System
Operator shall be a member of the Electric Reliability Or-
ganization and shall be a member of any Affiliated Re-
gional Reliability Entity operating under an agreement ef-
fective pursuant to subsection (i) applicable to the region
in which the System Operator operates or is responsible
for the operation of a Bulk-Power System facility.
‘‘(k) FEDERAL POWER SYSTEMS
AND NUCLEAR
REGULATORY COMMISSION.—Any actions taken under
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this section by the Commission, the Electric Reliability Or-
ganization, and any Affiliated Regional Reliability Entity
shall be consistent with any statutory or treaty obligations
of a Federal Power Marketing Administration, the Ten-
nessee Valley Authority, the Bureau of Reclamation and
the Corps of Engineers and any Nuclear Regulatory Com-
mission requirements.
‘‘(l) INJUNCTIONS AND DISCIPLINARY ACTION.—(1)
Consistent with the range of actions approved by the Com-
mission under subsection (e)(4)(H), the Electric Reli-
ability Organization may impose a penalty; may limit ac-
tivities, functions, or operations; or may take other dis-
ciplinary action the Electric Reliability Organization finds
appropriate against a User of the Bulk-Power System if
the Electric Reliability Organization, after notice and an
opportunity for interested parties to be heard, issues a
finding in writing that the User of the Bulk-Power System
has violated an Organization Standard approved by the
Commission. The Electric Reliability Organization shall
immediately notify the Commission of any disciplinary ac-
tion imposed with respect to an act or failure of a User
of the Bulk-Power System that affected or threatened to
affect Bulk-Power System facilities located in the United
States, and the sanctioned party shall have the right to
seek modification or rescission by the Commission of such
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disciplinary action. If the Organization finds it necessary
to prevent a serious threat to reliability, the Organization
may seek injunctive relief in a Federal Court in the dis-
trict in which the affected facilities are located.
‘‘(2) A disciplinary action taken under paragraph (1)
may take effect not earlier than the 30th day after the
Electric Reliability Organization files with the Commission
its written finding and record of proceedings before the
Electric Reliability Organization and the Commission
posts the Organization’s written finding, unless the Com-
mission, on its own motion or upon application by the
User of the Bulk-Power System which is the subject of
the action, suspends the action. The action shall remain
in effect or remain suspended unless and until the Com-
mission, after notice and opportunity for hearing, affirms,
sets aside, modifies, or reinstates the action, but the Com-
mission shall conduct such a hearing under procedures es-
tablished to ensure expedited consideration of the action
taken.
‘‘(3) The Commission, on its own motion, may order
compliance with an Organization Standard and may im-
pose a penalty; may limit activities, functions, or oper-
ations; or may take such other disciplinary action as the
Commission finds appropriate, against a User of the Bulk-
Power System with respect to actions affecting or threat-
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ening to affect Bulk-Power System facilities located in the
United States if the Commission finds, after notice and
opportunity for a hearing, that the User of the Bulk-
Power System has violated or threatens to violate an Or-
ganization Standard.
‘‘(4) The Commission may take such action as is nec-
essary against the Electric Reliability Organization or an
Affiliated Regional Reliability Entity to assure compliance
with an Organization Standard, or any Commission order
affecting the Electric Reliability Organization or an Affili-
ated Regional Reliability Entity.
‘‘(m) RELIABILITY REPORTS.—The Electric Reli-
ability Organization shall conduct periodic assessments of
the reliability and adequacy of the interconnected Bulk-
Power System in North America and shall report annually
to the Secretary of Energy and the Commission its find-
ings and recommendations for monitoring or improving
system reliability and adequacy.
‘‘(n) ASSESSMENT
AND RECOVERY
OF CERTAIN
COSTS.—The reasonable costs of the Electric Reliability
Organization, and the reasonable costs of each Affiliated
Regional Reliability Entity that are related to implementa-
tion and enforcement of Organization Standards or other
requirements contained in a delegation agreement, ap-
proved under subsection (i), shall be assessed by the Elec-
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tric Reliability Organization and each Affiliated Regional
Reliability Entity, respectively, taking into account the re-
lationship of costs to each region and based on an alloca-
tion that reflects an equitable sharing of the costs among
all end-users. The Commission shall provide by rule for
the review of such costs and allocations, pursuant to the
standards in this subsection and subsection (e)(4)(F).
‘‘(o) RULE OF REASON STANDARD.—In any action
under the antitrust laws, the conduct of the Electric Reli-
ability Organization, of an Affiliated Regional Reliability
Entity operating under an agreement in effect under sub-
section (i), or a member of the Electric Reliability Organi-
zation or an Affiliated Regional Reliability Entity, to the
extent such conduct is undertaken to develop or implement
an Organization Standard which is approved by the Com-
mission under subsection (f), shall not be deemed illegal
per se. Such conduct shall be judged on the basis of its
reasonableness, taking into account all relevant factors af-
fecting competition. For purposes of this section, ‘anti-
trust laws’ has the meaning given it in subsection (a) of
the first section of the Clayton Act, except that such term
includes section 5 of the Federal Trade Commission Act
to the extent that such section 5 applies to unfair methods
of competition.’’.
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(b) CONFORMING AMENDMENTS.—(1) Section 316 of
the FPA is amended by striking ‘‘or 214’’ each place it
appears and inserting ‘‘214, or 218’’.
(2) Section 316A of the FPA is amended by striking
‘‘section 211, 212, 213, or 214’’ each time it appears and
inserting ‘‘Part II of this Act’’.
SEC. 602. ELECTRICITY OUTAGE INVESTIGATION.
Title II of the Department of Energy Organization
Act is amended by adding the following new section after
section 213 as added by section 408:
‘‘SEC. 214. ELECTRICITY OUTAGE INVESTIGATION BOARD.
‘‘(a) ESTABLISHMENT; MEMBERSHIP; TERMS.—The
Secretary shall establish an Electricity Outage Investiga-
tion Board. The Board shall consist of five members, ap-
pointed by the Secretary. Each member shall serve a term
of three years.
‘‘(b) DUTIES.—The Board shall—
‘‘(1) investigate a major bulk-power system fail-
ure in the United States to determine its causes,
‘‘(2) report to the Secretary the results of the
investigation, and
‘‘(3) recommend to the Secretary actions to
minimize the possibility of a future bulk-power sys-
tem failure.
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‘‘(c) FEDERAL ADVISORY COMMITTEE ACT.—The
Board shall not be subject to the Federal Advisory Com-
mittee Act (5 U.S.C. Appx.).’’.
SEC. 603. ADDITIONAL TRANSMISSION CAPACITY.
Section 209 of PURPA is amended by adding a new
subsection after subsection (c):
‘‘(d) CONSIDERATION
OF
ADDITIONAL
TRANS-
MISSION CAPACITY.—The Secretary may call and chair a
meeting of representatives of States in a region in order
to discuss provision of additional transmission capacity
and related concerns in such region.’’.
TITLE VII—ENVIRONMENTAL
PROTECTION
SEC. 701. NITROGEN OXIDES CAP AND TRADE PROGRAM.
(a) PURPOSE.—The purpose of this section is to fa-
cilitate the implementation of a regional strategy for re-
ducing ambient concentrations of ozone through regional
reductions in emissions of NOX.
(b) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘Administrator’’ means the Ad-
ministrator of the Environmental Protection Agency,
(2) the term ‘‘NOX’’ means oxides of nitrogen,
(3) the term ‘‘NOX allowance’’ means an au-
thorization to emit a specified amount of NOX into
the atmosphere, and
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(4) the term ‘‘NOX allowance cap and trade
program’’ means a program under which, in accord-
ance with regulations issued by the Administrator,
the Administrator establishes the maximum number
of NOX allowances that may be allocated for speci-
fied control periods, allocates or authorizes a State
to allocate NOX allowances, allows the transfer of
NOX allowances for use in States subject to such a
program, requires monitoring and reporting of NOX
emissions that meet the requirements of section 412
of the Clean Air Act, and prohibits, and requires
penalties and offsets for, any emissions of NOX in
excess of the number of NOX allowances held.
(c) PROGRAM IMPLEMENTATION.—(1) If the Admin-
istrator determines under section 110(a)(2)(D) of the
Clean Air Act that any source or other type of emissions
activity in a State emits NOX in amounts that will con-
tribute significantly to nonattainment in, or interfere with
maintenance by, any other State with respect to any na-
tional ambient air quality standard for ozone, the Admin-
istrator shall establish by regulation, within 12 months of
the determination for primary standards and as expedi-
tiously as practicable for secondary standards, and shall
administer a NOX allowance cap and trade program in
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all States in which such a source or other type of emissions
activity is located.
(2) Any NOX allowance cap and trade program shall
contribute to providing for emissions reductions that miti-
gate adequately the contribution or interference and shall
be taken into account by the Administrator in determining
compliance with section 110(a)(2)(D) of the Clean Air
Act.
(3) For purposes of sections 113, 114, 304, and 307
of the Clean Air Act, regulations promulgated under this
section shall be treated as regulations promulgated under
title IV of the Clean Air Act (entitled Acid Deposition
Control). A requirement of regulations promulgated under
this section is considered an ‘‘emission standard’’ or
‘‘emission limitation’’ within the meaning of section 302
of the Clean Air Act and an ‘‘emission standard or limita-
tion under this Act’’ within the meaning of section 304
of the Clean Air Act.
TITLE VIII—FEDERAL POWER
SYSTEMS
Subtitle A—Tennessee Valley
Authority
SEC. 801. DEFINITION.
Section 3 of the Federal Power Act is amended by
adding after paragraph (25) the following new paragraph:
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‘‘(26) ‘TVA’ means the Tennessee Valley Au-
thority, an agency and instrumentality of the United
States created by the Tennessee Valley Authority
Act of 1933;’’.
SEC. 802. APPLICATION OF FEDERAL POWER ACT.
Part II of the Federal Power Act is amended by add-
ing the following new section after section 201:
‘‘APPLICATION TO FEDERAL POWER SYSTEMS
‘‘SEC. 201A. (a) After January 1, 2003, sections 202
(h) and (i), 203 (with respect to dispositions of trans-
mission facilities), 205, 206, 208, and 210 through 213
of this Part and sections 301 through 304, 306, 307 (ex-
cept the last sentence of paragraph (c)), 308, 309, 313,
and 317 of Part III apply to TVA’s transmission facilities
and transmission of electric energy and the provision of
necessary associated services over the TVA Transmission
System, except that any determination made by the Com-
mission under those provisions as to whether an action
or matter is just, reasonable, or not unduly discriminatory
or preferential shall be subject to any other laws applicable
to TVA, including the requirement that TVA recover its
costs.’’.
SEC. 803. ANTITRUST COVERAGE.
The Tennessee Valley Authority Act of 1933 (16
U.S.C. 831–831ee) is amended by adding the following
after section 21:
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‘‘SEC. 21a. ANTITRUST LAWS.
‘‘(a) Subject to subsection (b), effective January 1,
2003, the Tennessee Valley Authority is subject to the
antitrust laws of the United States with respect to the op-
eration of its electric power system. For purposes of this
section, ‘antitrust laws,’ has the meaning given it in sub-
section (a) of the first section of the Clayton Act (15
U.S.C. 12(a)), except that it includes the Act of June 19,
1936 (15 U.S.C. 13 et seq.), commonly known as the Rob-
inson-Patman Act, and section 5 of the Federal Trade
Commission Act (15 U.S.C. 45), to the extent that section
5 applies to unfair methods of competition.
‘‘(b) No damages, interest on damages, costs, or at-
torney’s fees may be recovered under section 4, 4A, or 4C
of the Clayton Act (15 U.S.C. 15, 15a, or 15c) from the
Tennessee Valley Authority.’’.
SEC. 804. TVA POWER SALES.
The Tennessee Valley Authority Act of 1933 (16
U.S.C. 831–831ee) is amended by adding the following
after section 15d:
‘‘SEC. 15e. SALE OF ELECTRIC POWER AT WHOLESALE AND
RETAIL.
‘‘(a) For the purposes of this section:
‘‘(1) ‘distributor’ means an electric power sys-
tem that—
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‘‘(A) is owned by a cooperative organiza-
tion or by a municipality or other public body
(or any successor in interest), and
‘‘(B) on the date of enactment of this sec-
tion, purchased electric power at wholesale from
the Tennessee Valley Authority under an all-re-
quirements power contract; and
‘‘(2) ‘distributor service area’ means the geo-
graphic area within which a distributor is authorized
on the date of enactment of this section to provide
electric power at retail to the ultimate consumer.
‘‘(b)(1) Effective January 1, 2003, the Tennessee
Valley Authority may sell electric power at wholesale to
any person.
‘‘(2) Beginning January 1, 2003, the Tennessee Val-
ley Authority shall not sell power at retail, except it may
sell power to a retail customer who consumes that power
within a distributor service area, if—
‘‘(A) the customer (or predecessor in interest)
purchased electric power directly from the Tennessee
Valley Authority as a retail customer on the date of
enactment of this section, or
‘‘(B) the distributor’s firm power purchases
from the Tennessee Valley Authority are 50 percent
or less of its total retail sales, or
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‘‘(C) the distributor agrees that the Tennessee
Valley Authority can sell power to the customer.
Nothing in this paragraph shall prohibit the Tennessee
Valley Authority from continuing to serve a retail cus-
tomer which the Tennessee Valley Authority was serving
on the date of enactment of this section that is not located
within a distributor service area.
‘‘(3) Notwithstanding any other provision of law, the
rates, terms, and conditions of retail electric service, and
rates for the use of distribution lines are not subject to
regulation by the Tennessee Valley Authority.’’.
SEC. 805. RENEGOTIATION OF LONG-TERM POWER CON-
TRACTS.
Section 15e of the Tennessee Valley Authority Act
of 1933 (16 U.S.C. 831–831ee) as added by section 804
of this Act is amended by adding the following after sub-
section (b):
‘‘(c)(1) Within one year following the date of enact-
ment of this section, the Tennessee Valley Authority and
the distributors shall renegotiate their existing long-term
contracts with respect to—
‘‘(A) the remaining term;
‘‘(B) the length of the termination notice;
‘‘(C) the amount of power a distributor may
purchase from a supplier other than the Tennessee