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utility of its obligation to purchase electric energy, a 
qualifying cogeneration facility, a qualifying small 
power production facility, a State agency, or any 
other affected person may apply to the Commission 
for an order reinstating the electric utility’s obliga-
tion to purchase electric energy under this section. 
Such application shall set forth the factual basis upon 
which the application is based and describe why the 
conditions set forth in subparagraphs (A), (B) or (C) 
of paragraph (1) of this subsection are no longer met. 
After notice, including sufficient notice to potentially 
affected utilities, and opportunity for comment, the 
Commission shall issue an order within 90 days of 
such application reinstating the electric utility’s obli-
gation to purchase electric energy under this section 
if the Commission finds that the conditions set forth 
in subparagraphs (A), (B) or (C) of paragraph (1) 
which relieved the obligation to purchase, are no 
longer met. 
‘‘(5) OBLIGATION TO SELL.—After the date of en-
actment of this subsection, no electric utility shall be 
required to enter into a new contract or obligation to 
sell electric energy to a qualifying cogeneration facil-
ity or a qualifying small power production facility 
under this section if the Commission finds that—
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‘‘(A) competing retail electric suppliers are 
willing and able to sell and deliver electric en-
ergy to the qualifying cogeneration facility or 
qualifying small power production facility; and 
‘‘(B) the electric utility is not required by 
State law to sell electric energy in its service ter-
ritory. 
‘‘(6) NO EFFECT ON EXISTING RIGHTS AND REM-
EDIES.—Nothing in this subsection affects the rights 
or remedies of any party under any contract or obli-
gation, in effect or pending approval before the ap-
propriate State regulatory authority or non-regulated 
electric utility on the date of enactment of this sub-
section, to purchase electric energy or capacity from 
or to sell electric energy or capacity to a qualifying 
cogeneration facility or qualifying small power pro-
duction facility under this Act (including the right to 
recover costs of purchasing electric energy or capac-
ity). 
‘‘(7) RECOVERY OF COSTS.—(A) The Commission 
shall issue and enforce such regulations as are nec-
essary to ensure that an electric utility that purchases 
electric energy or capacity from a qualifying cogen-
eration facility or qualifying small power production 
facility in accordance with any legally enforceable ob-
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ligation entered into or imposed under this section re-
covers all prudently incurred costs associated with the 
purchase. 
‘‘(B) A regulation under subparagraph (A) shall 
be enforceable in accordance with the provisions of 
law applicable to enforcement of regulations under the 
Federal Power Act (16 U.S.C. 791a et seq.). 
‘‘(n) RULEMAKING
FOR NEW QUALIFYING FACILI-
TIES.—(1)(A) Not later than 180 days after the date of en-
actment of this section, the Commission shall issue a rule 
revising the criteria in 18 C.F.R. 292.205 for new quali-
fying cogeneration facilities seeking to sell electric energy 
pursuant to section 210 of this Act to ensure— 
‘‘(i) that the thermal energy output of a new 
qualifying cogeneration facility is used in a produc-
tive and beneficial manner; 
‘‘(ii) the electrical, thermal, and chemical output 
of the cogeneration facility is used fundamentally for 
industrial, commercial, or institutional purposes and 
is not intended fundamentally for sale to an electric 
utility, taking into account technological, efficiency, 
economic, and variable thermal energy requirements, 
as well as State laws applicable to sales of electric en-
ergy from a qualifying facility to its host facility; 
and
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‘‘(iii) continuing progress in the development of 
efficient electric energy generating technology. 
‘‘(B) The rule issued pursuant to section (n)(1)(A) 
shall be applicable only to facilities that seek to sell electric 
energy pursuant to section 210 of this Act. For all other 
purposes, except as specifically provided in section 
(m)(2)(A), qualifying facility status shall be determined in 
accordance with the rules and regulations of this Act. 
‘‘(2) Notwithstanding rule revisions under paragraph 
(1), the Commission’s criteria for qualifying cogeneration 
facilities in effect prior to the date on which the Commis-
sion issues the final rule required by paragraph (1) shall 
continue to apply to any cogeneration facility that— 
‘‘(A) was a qualifying cogeneration facility on 
the date of enactment of subsection (m), or 
‘‘(B) had filed with the Commission a notice of 
self-certification, self-recertification or an application 
for Commission certification under 18 C.F.R. 292.207 
prior to the date on which the Commission issues the 
final rule required by paragraph (1).’’. 
(b) ELIMINATION OF OWNERSHIP LIMITATIONS.— 
(1) QUALIFYING SMALL POWER PRODUCTION FA-
CILITY.—Section 3(17)(C) of the Federal Power Act 
(16 U.S.C. 796(17)(C)) is amended to read as follows:
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‘‘(C) ‘qualifying small power production fa-
cility’ means a small power production facility 
that the Commission determines, by rule, meets 
such requirements (including requirements re-
specting fuel use, fuel efficiency, and reliability) 
as the Commission may, by rule, prescribe;’’. 
(2) QUALIFYING COGENERATION FACILITY.—Sec-
tion 3(18)(B) of the Federal Power Act (16 U.S.C. 
796(18)(B)) is amended to read as follows: 
‘‘(B) 
‘qualifying 
cogeneration 
facility’ 
means a cogeneration facility that the Commis-
sion determines, by rule, meets such requirements 
(including requirements respecting minimum 
size, fuel use, and fuel efficiency) as the Commis-
sion may, by rule, prescribe;’’. 
SEC. 1254. INTERCONNECTION. 
(a) ADOPTION OF STANDARDS.—Section 111(d) of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2621(d)) (as amended by section 1252(a)) is amended by 
adding at the end the following: 
‘‘(15) INTERCONNECTION.—(A) In this para-
graph, the term ‘interconnection service’ means serv-
ice to an electric consumer by which an on-site gener-
ating facility on the premises of the electric consumer 
is connected to the local distribution facilities.
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‘‘(B)(i) Each electric utility shall make avail-
able, on request, interconnection service to any electric 
consumer that the electric utility serves. 
‘‘(ii) Interconnection services shall be made 
available under clause (i) based on the standards de-
veloped by the Institute of Electrical and Electronics 
Engineers, entitled ‘‘IEEE Standard 1547 for Inter-
connecting Distributed Resources with Electric Power 
Systems’’ (or successor standards). 
‘‘(C)(i) Electric utilities shall establish agree-
ments and procedures providing that the interconnec-
tion services made available under subparagraph (B) 
promote current best practices of interconnection for 
distributed generation, including practices stipulated 
in model codes adopted by associations of State regu-
latory agencies. 
‘‘(ii) Any agreements and procedures established 
under clause (i) shall be just and reasonable and not 
unduly discriminatory or preferential.’’. 
(b) COMPLIANCE.— 
(1) TIME LIMITATIONS.—Section 112(b) of the 
Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2622(b)) (as amended by section 1252(g)) is 
amended by adding at the end the following: