467 
the Commission shall prepare and publish an annual 
report, by appropriate region, that assesses demand 
response resources, including those available from all 
consumer classes, and which identifies and reviews— 
(A) saturation and penetration rate of ad-
vanced meters and communications technologies, 
devices and systems; 
(B) existing demand response programs and 
time-based rate programs; 
(C) the annual resource contribution of de-
mand resources; 
(D) the potential for demand response as a 
quantifiable, reliable resource for regional plan-
ning purposes; 
(E) steps taken to ensure that, in regional 
transmission planning and operations, demand 
resources are provided equitable treatment as a 
quantifiable, reliable resource relative to the re-
source obligations of any load-serving entity, 
transmission provider, or transmitting party; 
and 
(F) regulatory barriers to improved cus-
tomer participation in demand response, peak 
reduction and critical period pricing programs.
468 
(f) FEDERAL ENCOURAGEMENT
OF DEMAND RE-
SPONSE DEVICES.—It is the policy of the United States that 
time-based pricing and other forms of demand response, 
whereby electricity customers are provided with electricity 
price signals and the ability to benefit by responding to 
them, shall be encouraged, the deployment of such tech-
nology and devices that enable electricity customers to par-
ticipate in such pricing and demand response systems shall 
be facilitated, and unnecessary barriers to demand response 
participation in energy, capacity and ancillary service 
markets shall be eliminated. It is further the policy of the 
United States that the benefits of such demand response that 
accrue to those not deploying such technology and devices, 
but who are part of the same regional electricity entity, 
shall be recognized. 
(g) TIME LIMITATIONS.—Section 112(b) of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) 
is amended by adding at the end the following: 
‘‘(4)(A) Not later than 1 year after the enact-
ment of this paragraph, each State regulatory author-
ity (with respect to each electric utility for which it 
has ratemaking authority) and each nonregulated 
electric utility shall commence the consideration re-
ferred to in section 111, or set a hearing date for such
469 
consideration, with respect to the standard established 
by paragraph (14) of section 111(d). 
‘‘(B) Not later than 2 years after the date of the 
enactment of this paragraph, each State regulatory 
authority (with respect to each electric utility for 
which it has ratemaking authority), and each non-
regulated electric utility, shall complete the consider-
ation, and shall make the determination, referred to 
in section 111 with respect to the standard established 
by paragraph (14) of section 111(d).’’. 
(h) FAILURE TO COMPLY.—Section 112(c) of the Pub-
lic Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2622(c)) is amended by adding at the end the following: 
‘‘In the case of the standard established by paragraph (14) 
of section 111(d), the reference contained in this subsection 
to the date of enactment of this Act shall be deemed to be 
a reference to the date of enactment of such paragraph 
(14).’’. 
(i) PRIOR STATE ACTIONS REGARDING SMART ME-
TERING STANDARDS.— 
(1) IN
GENERAL.—Section 112 of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2622) is amended by adding at the end the following: 
‘‘(e) PRIOR STATE ACTIONS.—Subsections (b) and (c) 
of this section shall not apply to the standard established
470 
by paragraph (14) of section 111(d) in the case of any elec-
tric utility in a State if, before the enactment of this sub-
section— 
‘‘(1) the State has implemented for such utility 
the standard concerned (or a comparable standard); 
‘‘(2) the State regulatory authority for such 
State or relevant nonregulated electric utility has con-
ducted a proceeding to consider implementation of the 
standard concerned (or a comparable standard) for 
such utility within the previous 3 years; or 
‘‘(3) the State legislature has voted on the imple-
mentation of such standard (or a comparable stand-
ard) for such utility within the previous 3 years.’’. 
(2) CROSS REFERENCE.—Section 124 of such Act 
(16 U.S.C. 2634) is amended by adding the following 
at the end thereof: ‘‘In the case of the standard estab-
lished by paragraph (14) of section 111(d), the ref-
erence contained in this subsection to the date of en-
actment of this Act shall be deemed to be a reference 
to the date of enactment of such paragraph (14).’’. 
SEC. 1253. COGENERATION AND SMALL POWER PRODUC-
TION PURCHASE AND SALE REQUIREMENTS. 
(a) TERMINATION
OF MANDATORY PURCHASE
AND 
SALE REQUIREMENTS.—Section 210 of the Public Utility
471 
Regulatory Policies Act of 1978 (16 U.S.C. 824a–3) is 
amended by adding at the end the following: 
‘‘(m) TERMINATION OF MANDATORY PURCHASE AND 
SALE REQUIREMENTS.— 
‘‘(1) OBLIGATION TO PURCHASE.—After the date 
of enactment of this subsection, no electric utility 
shall be required to enter into a new contract or obli-
gation to purchase electric energy from a qualifying 
cogeneration facility or a qualifying small power pro-
duction facility under this section if the Commission 
finds that the qualifying cogeneration facility or 
qualifying small power production facility has non-
discriminatory access to— 
‘‘(A)(i) independently administered, auc-
tion-based day ahead and real time wholesale 
markets for the sale of electric energy; and (ii) 
wholesale markets for long-term sales of capacity 
and electric energy; or 
‘‘(B)(i) transmission and interconnection 
services that are provided by a Commission-ap-
proved regional transmission entity and admin-
istered pursuant to an open access transmission 
tariff that affords nondiscriminatory treatment 
to all customers; and (ii) competitive wholesale 
markets that provide a meaningful opportunity
472 
to sell capacity, including long-term and short- 
term sales, and electric energy, including long- 
term, short-term and real-time sales, to buyers 
other than the utility to which the qualifying fa-
cility is interconnected. In determining whether 
a meaningful opportunity to sell exists, the Com-
mission shall consider, among other factors, evi-
dence of transactions within the relevant market; 
or 
‘‘(C) wholesale markets for the sale of capac-
ity and electric energy that are, at a minimum, 
of comparable competitive quality as markets de-
scribed in subparagraphs (A) and (B). 
‘‘(2) REVISED PURCHASE AND SALE OBLIGATION 
FOR NEW FACILITIES.—(A) After the date of enact-
ment of this subsection, no electric utility shall be re-
quired pursuant to this section to enter into a new 
contract or obligation to purchase from or sell electric 
energy to a facility that is not an existing qualifying 
cogeneration facility unless the facility meets the cri-
teria for qualifying cogeneration facilities established 
by the Commission pursuant to the rulemaking re-
quired by subsection (n).