I
105TH CONGRESS
1ST SESSION
H. R. 655
To give all American electricity consumers the right to choose among competi-
tive providers of electricity, in order to secure lower electricity rates,
higher quality services, and a more robust United States economy, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 10, 1997
Mr. SCHAEFER introduced the following bill; which was referred to the
Committee on Commerce
A BILL
To give all American electricity consumers the right to choose
among competitive providers of electricity, in order to
secure lower electricity rates, higher quality services, and
a more robust United States economy, 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 AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Electric Consumers’ Power to Choose Act of 1997’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
Sec. 2. Findings and purpose.
Sec. 3. Severability.
TITLE I—COMPETITIVE RETAIL ELECTRIC ENERGY SERVICE
Sec. 101. Definitions.
Sec. 102. Customer choice.
Sec. 103. Retail competition for State regulated electric utilities.
Sec. 104. Retail competition for nonregulated electric utilities.
Sec. 105. Jurisdiction of State courts.
Sec. 106. FERC authority for certain utilities.
Sec. 107. Prior State adoption.
Sec. 108. Antitrust laws.
Sec. 109. FERC authority for transmission.
Sec. 110. Effect on other authorities.
Sec. 111. Barriers to entry.
Sec. 112. Illegal changes in customer selections.
Sec. 113. Renewable energy.
Sec. 114. Jurisdictional determinations of transmission and local distribution
facilities.
TITLE II—PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Sec. 201. Applicability of title; relationship to Public Utility Holding Company
Act of 1935.
Sec. 202. Definitions.
Sec. 203. Federal access to books and records.
Sec. 204. Exemption authority regarding Federal access.
Sec. 205. State access to books and records.
Sec. 206. Affiliate transactions.
Sec. 207. Application of title.
Sec. 208. Effect on other regulation.
Sec. 209. Enforcement.
Sec. 210. Saving provision.
Sec. 211. Implementation.
Sec. 212. Transfers.
Sec. 213. Conforming change.
TITLE III—PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978
Sec. 301. Application of PURPA provisions.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds that:
(1) Low cost and reliable electricity is integral
to the vitality of the United States economy, the
competitiveness of domestically made goods and the
quality of life of all Americans.
(2) Americans consume electricity worth more
than $200 billion a year, approximately half of
which is for residential purposes, making the month-
ly electric utility bill one of the largest expenses for
most households.
(3) The cost of electricity has a direct effect on
the price, profitability, and competitiveness of goods
and services produced in the United States.
(4) Lower priced electricity can be realized by
giving all American consumers the right to choose
among suppliers of electricity in a competitive mar-
ket, while maintaining, if not improving, the reliabil-
ity of service those consumers have come to expect.
(5) The development of vibrant competition in
the retail market for electric energy will—
(A) reduce the costs of electric energy to
even the smallest consumers of electricity;
(B) create jobs as American businesses are
able to lower costs and better compete in world
markets and against foreign competition here at
home; and
(C) result in a more efficient utility indus-
try.
(6) Monopoly rate-of-return regulation of elec-
tricity has failed. It has stifled competition, resulting
in high electricity rates for many consumers and few
incentives for technological innovation and good cus-
tomer service by electric utilities.
(7) High electricity rates are regressive, placing
a disproportionate burden on poor ratepayers.
(8) High electricity rates divert consumer dol-
lars that would otherwise be spent for purchasing
necessary goods and services, savings, or invest-
ments that benefit the economy as a whole.
(9) Congress has authority to enact laws, under
the Commerce Clause of the United States Constitu-
tion, regarding the generation, transmission, dis-
tribution, and sale of electric energy in interstate
commerce at the wholesale and retail levels.
(10) Only Congress can ensure that a competi-
tive retail electricity market is established through-
out the United States on an expeditious but orderly
basis. Regional and State variations, however, re-
quire that State regulatory authorities should receive
deference in implementing competition and consumer
choice in retail electricity markets.
(11) Customers of all utilities, whether served
by regulated or nonregulated electric utilities (such
as municipally owned utilities or rural cooperatives)
should have the same rights to receive the benefits
of competition and consumer choice.
(12) In a competitive generation market, it is in
the national interest to continue to encourage the
development of renewable energy technologies in
order to ensure energy diversity and security and to
protect the environment.
(13) A national program is needed to promote
renewable energy development that is market driven
and encourages competition among different renew-
able technologies. This program should be limited in
scope and should be terminated when the goals of
the program are achieved.
(14) Subjecting renewable energy technologies
to the discipline of the free market will better allo-
cate renewable resources and speed the commer-
cialization of renewable technologies than traditional
centralized government resource planning.
(b) PURPOSE.—The purpose of this Act is to give all
American electricity consumers the right to choose among
competitive providers of electricity, in order to secure
lower electricity rates, higher quality services, and a more
robust United States economy.
SEC. 3. SEVERABILITY.
If any provision of this Act, or the application of such
provision to any person or circumstance, shall be held in-
valid, the remainder of the Act, and the application of
such provision to persons or circumstances other than
those as to which it is held invalid, shall not be affected
thereby.
TITLE I—COMPETITIVE RETAIL
ELECTRIC ENERGY SERVICE
SEC. 101. DEFINITIONS.
For purposes of this title:
(1) The term ‘‘Commission’’ means the Federal
Energy Regulatory Commission.
(2) The terms ‘‘State regulatory authority’’,
‘‘State regulated electric utility’’ and ‘‘nonregulated
electric utility’’ have the same meaning as such
terms have in the Public Utility Regulatory Policies
Act of 1978, as provided by section 3 of that Act.
(3) The term ‘‘retail electric energy service’’
means each of the following:
(A) Electric energy sold for ultimate con-
sumption.
(B) Aggregating or marketing electric en-
ergy for sale for ultimate consumption.
(C) Billing and metering services and
equipment for electric energy sold for ultimate
consumption.
(D) Energy management services and
equipment for electric energy sold for ultimate
consumption.
(E) Any other electric service or equipment
for which an alternative to that provided by an
electric utility is offered to an electric utility re-
tail customer of such utility by any person
other than such utility.
(4) The term ‘‘electric utility retail customer’’
means a person who purchases retail electric energy
services.
(5) The term ‘‘regulated electric utility retail
customer’’ means an electric utility retail customer
who is served by the local distribution system of a
State regulated electric utility.
(6) The term ‘‘nonregulated electric utility re-
tail customer’’ means an electric utility retail cus-
tomer who is served by the local distribution system
of a nonregulated electric utility.
(7) The term ‘‘affiliate’’ when used with respect
to an electric utility means any person that controls,
is controlled by, or is under common control with,
such utility.
(8) The term ‘‘renewable energy’’ means elec-
tricity generated from organic waste, biomass, dedi-
cated energy crops, landfill gas, geothermal, solar,
tidal, or wind resources.
(9) The term ‘‘Renewable Energy Credit’’
means a tradable certificate of proof that one unit
(as determined by the Commission) of renewable en-
ergy was generated by any person.
(10) The term ‘‘electric generator’’ means a
person generating electric energy.
(11) The term ‘‘State’’ means any State and
the District of Columbia.
SEC. 102. CUSTOMER CHOICE.
By no later than December 15, 2000, all electric util-
ity retail customers shall have the right to purchase retail
electric energy services from any person offering to pro-
vide those services to such customers.
SEC. 103. RETAIL COMPETITION FOR STATE REGULATED
ELECTRIC UTILITIES.
(a) STATE ELECTION.—A State may elect to estab-
lish, by no later than December 15, 2000, retail electric
service choice in accordance with this Act for retail cus-
tomers of State regulated electric utilities in such State.
Such election shall be made through submission by the
State regulatory authority exercising ratemaking jurisdic-
tion over such utilities of a notice to the Commission with-
in 6 months after the enactment of this Act. If, within
such 6-month period, the State regulatory authority noti-
fies the Commission that additional legislative authority
is needed in order for the State regulatory authority to
make such an election, the 6 month date shall be extended
to a date 2 years after the enactment of this Act. Any
State that established retail electric service choice for re-
tail customers of State regulated electric utilities in such
State before the enactment of this Act may submit a no-
tice under this section within 6 months after the enact-
ment of this Act.
(b) CUSTOMER CHOICE AND NONDISCRIMINATORY
ACCESS.—If a State elects to establish retail electric serv-
ice choice for State regulated electric utility customers, the
State regulatory authority exercising ratemaking authority
over State regulated electric utilities in the State shall es-
tablish such rules as will provide for each of the following:
(1) All State regulated electric utility retail cus-
tomers of all State regulated utilities under the rate-
making jurisdiction of the State regulatory authority
shall be able to purchase retail electric energy serv-
ices from any person offering to provide those serv-
ices to such customers.
(2) Any person seeking to provide any retail
electric energy service to such customers shall have
reasonable and nondiscriminatory access on an
unbundled basis, for the purposes of providing such
service, to local distribution facilities owned or oper-
ated by such State regulated utilities. Access to local
distribution facilities shall be provided under rates,
terms, and conditions that are just, reasonable and
not unduly discriminatory and that permit the recov-
ery by the facility owner or operator of all costs in-
curred in connection with the local distribution serv-
ice and necessary ancillary services. The local dis-
tribution services provided shall be at least equal in
quality to those provided by the utility to itself or
to any affiliate of the utility.
(3) Services that are not competitive may not
be used to subsidize services that are subject to com-
petition.
The State regulatory authority shall establish an effective
date for the application of the requirements set forth in
paragraphs (1) through (3) for all State regulated electric
utilities subject to the jurisdiction of such State regulatory
authority. Such date (hereinafter in this section referred
to as the ‘‘effective date for retail electric service choice’’)
shall not be later than December 15, 2000.
(c) PRICING FLEXIBILITY; INCENTIVE-BASED RATE
REGULATION.—Each State regulatory authority that
makes an election to establish retail electric service choice
for retail customers of a State regulated electric utility
subject to the jurisdiction of such State regulatory author-
ity shall implement, on the effective date of retail electric
service choice for such customers, appropriate flexible
pricing procedures and incentive-based rate regulation for
each retail electric energy service provided by such State
regulated electric utility. Such procedures shall afford the
utility the opportunity to respond fairly to competition.
(d) TERMINATION OF PRICE AND CERTAIN OTHER
REGULATION.—Each State regulatory authority that
makes an election to establish retail electric service choice
for retail customers of any State regulated electric utility
shall, on the effective date of such establishment, cease
to carry out each of the following with respect to any en-
tity that is not providing local distribution services to such
customers:
(1) Regulation of the prices for retail electric
energy services provided by such entity to such cus-
tomers.
SEC. 107. PRIOR STATE ADOPTION.
(a) PRIOR ADOPTION OF CUSTOMER CHOICE.—Noth-
ing in this title shall be construed to prohibit any State
or State regulatory authority or any nonregulated electric
utility from establishing or enforcing any statute, rule, or
regulation relating to retail electric service competition
prior to December 15, 2000, or to require any State or
State regulatory authority or nonregulated electric utility
to establish or enforce any statute, rule or regulation relat-
ing to retail electric service competition prior to December
15, 2000.
(b) PRESERVATION OF PRIOR CUSTOMER CHOICE.—
(1) STATE REGULATED ELECTRIC UTILITIES.—
For any State that established retail electric service
choice for State regulated electric utilities before the
enactment of this Act, nothing in this title shall be
construed to preempt any State statute, rule, or reg-
ulation relating to retail electric service choice to the
extent that such statute, rule, or regulation satisfies
the requirements of subsections (b) through (e) of
section 103.
(2) NONREGULATED
ELECTRIC
UTILITIES.—
For any nonregulated electric utility that established
retail electric service choice for its customers before
the enactment of this Act, nothing in this title shall
be construed to preempt any State or local statute,
rule, or regulation relating to retail electric service
choice for such customers to the extent that such
statute, rule, or regulation satisfies the requirements
of subsections (b) through (d) of section 104.
SEC. 108. ANTITRUST LAWS.
Nothing in this title or the amendments made by this
title shall be construed to modify, impair, or supersede the
applicability of any of the antitrust laws. As used in this
section the term ‘‘antitrust laws’’ includes the Sherman
Antitrust Act (15 U.S.C. 1 et seq.) and amendments
thereto, the Clayton Act (15 U.S.C. 12 et seq.) and
amendments thereto, regulations promulgated under such
laws, and Federal court decisions interpreting such laws.
SEC. 109. FERC AUTHORITY FOR TRANSMISSION.
(a) IN GENERAL.—The Commission may, by rule or
order, require a transmitting utility (as defined in the
Federal Power Act) to provide transmission of electric en-
ergy in interstate commerce (including any enlargement
of transmission capacity necessary to provide such service)
under such terms and conditions as the Commission finds
are necessary and appropriate to ensure that customers
have access to transmission services under terms and con-
ditions (including charges) that are comparable to those
under which the transmitting utility uses its own system
and are otherwise in the public interest.
(b) LIMITATION.—The Commission may not exercise
the authority of subsection (a) to require the transmission
of electric energy to any electric utility retail customer
prior to the effective date for retail electric choice (as de-
termined under section 103 or 104) for the electric utility
that provides local distribution service to such customer.
SEC. 110. EFFECT ON OTHER AUTHORITIES.
Nothing in this title shall be construed to prohibit
the Commission from using any authority of the Commis-
sion under part II of the Federal Power Act in fulfilling
the requirements of this title, to the extent that such au-
thority is not exercised in a manner inconsistent with the
provisions of this title.
SEC. 111. BARRIERS TO ENTRY.
(a) NONDISCRIMINATORY ACCESS.—After the effec-
tive date for retail electric service choice (as determined
under section 103 or 104) for a State regulated or non-
regulated electric utility, no State or local legal require-
ment (other than a facility siting requirement) may pro-
hibit or have the effect of prohibiting any entity from of-
fering to any electric utility retail customer of such utility
any retail electric energy service or from providing any re-
tail electric energy service directly or indirectly to any such
customer.
(b) STATE AND LOCAL REGULATORY AUTHORITY.—
A State or local government may, under State law, impose
requirements relating to retail electric energy services nec-
essary to ensure that adequate electric service is available
to all customers served by the retail distribution system
concerned, protect public safety and welfare, ensure the
continued quality of electric services and safeguard the
rights of consumers to the extent such requirements are
imposed on a nondiscriminatory and competitively neutral
basis.
(c) PARITY OF FRANCHISE AND OTHER CHARGES.—
A State or local government, under State law, may impose
or collect any franchise, license, permit fee, or equivalent
thereof, from any person providing any retail electric en-
ergy service as a condition for operating in the State or
locality, only to the extent such charge is imposed on a
nondiscriminatory and competitively neutral basis.
SEC. 112. ILLEGAL CHANGES IN CUSTOMER SELECTIONS.
(a) PROHIBITION.—No person shall submit or exe-
cute a change in the selection made by a regulated utility
retail customer or nonregulated utility retail customer of
a provider of retail electric energy services except in ac-
cordance with such verification procedures as the Commis-
sion shall prescribe. Nothing in this section shall preclude
any State regulatory authority from proscribing such addi-
tional procedures regarding changes in customer selection
with respect to intrastate retail electric energy services.
(b) LIABILITY FOR CHARGES.—Any person who vio-
lates the verification procedures described in subsection
(a) and that collects charges from a customer shall be lia-
ble—
(1) to the customer in an amount equal to all
charges paid by such customer after violation; and
(2) to the provider of retail electric energy serv-
ice previously selected by the customer in an amount
equal to all charges paid by such customer after vio-
lation.
The Commission may prescribe procedures for the recov-
ery of the amounts referred to in paragraphs (1) and (2).
The remedies provided by this section are in addition to
any other remedies available by law.
SEC. 113. RENEWABLE ENERGY.
(a) MINIMUM RENEWABLE GENERATION REQUIRE-
MENT.—For calendar years after December 31, 2000,
each electric generator that sells electric energy to any
other person shall submit to the Commission Renewable
Energy Credits in an amount equal to the required annual
percentage of the total electric energy generated by such
generator in the preceding calendar year. In determining
(b) EFFECT ON OTHER COMMISSION AUTHORITY.—
Nothing in this title limits the authority of the Commis-
sion under the Federal Power Act (including section 301
of that Act) or the Natural Gas Act (including section 8
of that Act).
SEC. 211. IMPLEMENTATION.
Not later than 18 months after the date of the enact-
ment of this Act, the Commission shall—
(1) promulgate such regulations as may be nec-
essary or appropriate to implement this title; and
(2) submit to the Congress detailed rec-
ommendations on technical and conforming amend-
ments to Federal law necessary to carry out this
title and the amendments made by this title.
SEC. 212. TRANSFERS.
All books, accounts, documents, and other records
that relate primarily to the functions hereby vested in the
Commission under this title shall be transferred from the
Securities and Exchange Commission to the Commission.
SEC. 213. CONFORMING CHANGE.
Section 318 of the Federal Power Act (16 U.S.C.
825q) is repealed.