757 
‘‘(b) DEFINITION.—For the purposes of this section, 
the term ‘round trip trade’ means a transaction, or com-
bination of transactions, in which a person or any other 
entity— 
‘‘(1) enters into a contract or other arrange-
ment to purchase from, or sell to, any other person 
or other entity electric energy at wholesale; 
‘‘(2) simultaneously with entering into the con-
tract or arrangement described in paragraph (1), ar-
ranges a financially offsetting trade with such other 
person or entity for the same such electric energy, 
at the same location, price, quantity and terms so 
that, collectively, the purchase and sale transactions 
in themselves result in no financial gain or loss; and 
‘‘(3) enters into the contract or arrangement 
with a specific intent to fraudulently affect reported 
revenues, trading volumes, or prices.’’. 
SEC. 1283. ENFORCEMENT. 
(a) COMPLAINTS.—Section 306 of the Federal Power 
Act (16 U.S.C. 825e) is amended as follows: 
(1) By inserting ‘‘electric utility,’’ after ‘‘Any 
person,’’. 
(2) By inserting ‘‘, transmitting utility,’’ after 
‘‘licensee’’ each place it appears.
758 
(b) REVIEW
OF
COMMISSION
ORDERS.—Section 
313(a) of the Federal Power Act (16 U.S.C. 8251) is 
amended by inserting ‘‘electric utility,’’ after ‘‘person,’’ in 
the first 2 places it appears and by striking ‘‘any person 
unless such person’’ and inserting ‘‘any entity unless such 
entity’’. 
(c) INVESTIGATIONS.—Section 307(a) of the Federal 
Power Act (16 U.S.C. 825f(a)) is amended as follows: 
(1) By inserting ‘‘, electric utility, transmitting 
utility, or other entity’’ after ‘‘person’’ each time it 
appears. 
(2) By striking the period at the end of the 
first sentence and inserting the following: ‘‘or in ob-
taining information about the sale of electric energy 
at wholesale in interstate commerce and the trans-
mission of electric energy in interstate commerce.’’. 
(d) CRIMINAL PENALTIES.—Section 316 of the Fed-
eral Power Act (16 U.S.C. 825o) is amended— 
(1) in subsection (a), by striking ‘‘$5,000’’ and 
inserting ‘‘$1,000,000’’, and by striking ‘‘two years’’ 
and inserting ‘‘5 years’’; 
(2) in subsection (b), by striking ‘‘$500’’ and 
inserting ‘‘$25,000’’; and 
(3) by striking subsection (c).
759 
(e) CIVIL PENALTIES.—Section 316A of the Federal 
Power Act (16 U.S.C. 825o–1) is amended as follows: 
(1) In subsections (a) and (b), by striking ‘‘sec-
tion 211, 212, 213, or 214’’ each place it appears 
and inserting ‘‘Part II’’. 
(2) In subsection (b), by striking ‘‘$10,000’’ 
and inserting ‘‘$1,000,000’’. 
SEC. 1284. REFUND EFFECTIVE DATE. 
Section 206(b) of the Federal Power Act (16 U.S.C. 
824e(b)) is amended as follows: 
(1) By striking ‘‘the date 60 days after the fil-
ing of such complaint nor later than 5 months after 
the expiration of such 60-day period’’ in the second 
sentence and inserting ‘‘the date of the filing of such 
complaint nor later than 5 months after the filing of 
such complaint’’. 
(2) By striking ‘‘60 days after’’ in the third 
sentence and inserting ‘‘of’’. 
(3) By striking ‘‘expiration of such 60-day pe-
riod’’ in the third sentence and inserting ‘‘publica-
tion date’’. 
(4) By striking the fifth sentence and inserting 
the following: ‘‘If no final decision is rendered by the 
conclusion of the 180-day period commencing upon 
initiation of a proceeding pursuant to this section,
760 
the Commission shall state the reasons why it has 
failed to do so and shall state its best estimate as 
to when it reasonably expects to make such deci-
sion.’’. 
SEC. 1285. REFUND AUTHORITY. 
Section 206 of the Federal Power Act (16 U.S.C. 
824e) is amended by adding the following new subsection 
at the end thereof: 
‘‘(e)(1) Except as provided in paragraph (2), if an 
entity described in section 201(f) voluntarily makes a 
short-term sale of electric energy and the sale violates 
Commission rules in effect at the time of the sale, such 
entity shall be subject to the Commission’s refund author-
ity under this section with respect to such violation. 
‘‘(2) This section shall not apply to— 
‘‘(A) any entity that sells less than 8,000,000 
megawatt hours of electricity per year; or 
‘‘(B) any electric cooperative. 
‘‘(3) For purposes of this subsection, the term ‘short- 
term sale’ means an agreement for the sale of electric en-
ergy at wholesale in interstate commerce that is for a pe-
riod of 31 days or less (excluding monthly contracts sub-
ject to automatic renewal). 
‘‘(4) The Commission shall have refund authority 
under subsection (e)(1) with respect to a voluntary short-
761 
term sale of electric energy by the Bonneville Power Ad-
ministration (in this section ‘Bonneville’) only if the sale 
is at an unjust and unreasonable rate and, in that event, 
may order a refund only for short-term sales made by 
Bonneville at rates that are higher than the highest just 
and reasonable rate charged by any other entity for a 
short-term sale of electric energy in the same geographic 
market for the same, or most nearly comparable, period 
as the sale by Bonneville. 
‘‘(5) With respect to any Federal power marketing 
agency or the Tennessee Valley Authority, the Commission 
shall not assert or exercise any regulatory authority or 
powers under subsection (e)(1) other than the ordering of 
refunds to achieve a just and reasonable rate.’’. 
SEC. 1286. SANCTITY OF CONTRACT. 
(a) IN GENERAL.—The Federal Energy Regulatory 
Commission (in this section, ‘‘the Commission’’) shall have 
no authority to abrogate or modify any provision of an 
executed contract or executed contract amendment de-
scribed in subsection (b) that has been entered into or 
taken effect, except upon a finding that failure to take 
such action would be contrary to the public interest. 
(b) LIMITATION.—Except as provided in subsection 
(c), this section shall apply only to a contract or contract 
amendment—
762 
(1) executed on or after the date of enactment 
of this Act; and 
(2) entered into— 
(A) for the purchase or sale of electric en-
ergy under section 205 of the Federal Power 
Act (16 U.S.C. 824d) where the seller has been 
authorized by the Commission to charge mar-
ket-based rates; or 
(B) under section 4 of the Natural Gas 
Act (15 U.S.C. 717c) where the natural gas 
company has been authorized by the Commis-
sion to charge market-based rates for the serv-
ice described in the contract. 
(c) EXCLUSION.—This section shall not apply to an 
executed contract or executed contract amendment that 
expressly provides for a standard of review other than the 
public interest standard. 
(d) SAVINGS PROVISION.—With respect to contracts 
to which this section does not apply, nothing in this sec-
tion alters existing law regarding the applicable standard 
of review for a contract subject to the jurisdiction of the 
Commission.
763 
SEC. 1287. CONSUMER PRIVACY AND UNFAIR TRADE PRAC-
TICES. 
(a) PRIVACY.—The Federal Trade Commission may 
issue rules protecting the privacy of electric consumers 
from the disclosure of consumer information obtained in 
connection with the sale or delivery of electric energy to 
electric consumers. 
(b) SLAMMING.—The Federal Trade Commission 
may issue rules prohibiting the change of selection of an 
electric utility except with the informed consent of the 
electric consumer or if approved by the appropriate State 
regulatory authority. 
(c) CRAMMING.—The Federal Trade Commission 
may issue rules prohibiting the sale of goods and services 
to an electric consumer unless expressly authorized by law 
or the electric consumer. 
(d) RULEMAKING.—The Federal Trade Commission 
shall proceed in accordance with section 553 of title 5, 
United States Code, when prescribing a rule under this 
section. 
(e) STATE AUTHORITY.—If the Federal Trade Com-
mission determines that a State’s regulations provide 
equivalent or greater protection than the provisions of this 
section, such State regulations shall apply in that State 
in lieu of the regulations issued by the Commission under 
this section.
764 
(f) DEFINITIONS.—For purposes of this section: 
(1) STATE
REGULATORY
AUTHORITY.—The 
term ‘‘State regulatory authority’’ has the meaning 
given that term in section 3(21) of the Federal 
Power Act (16 U.S.C. 796(21)). 
(2) ELECTRIC CONSUMER AND ELECTRIC UTIL-
ITY.—The terms ‘‘electric consumer’’ and ‘‘electric 
utility’’ have the meanings given those terms in sec-
tion 3 of the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 2602). 
Subtitle H—Merger Reform 
SEC. 1291. MERGER REVIEW REFORM AND ACCOUNT-
ABILITY. 
(a) MERGER REVIEW REFORM.—Within 180 days 
after the date of enactment of this Act, the Secretary of 
Energy, in consultation with the Federal Energy Regu-
latory Commission and the Attorney General of the United 
States, shall prepare, and transmit to Congress each of 
the following: 
(1) A study of the extent to which the authori-
ties vested in the Federal Energy Regulatory Com-
mission under section 203 of the Federal Power Act 
are duplicative of authorities vested in— 
(A) other agencies of Federal and State 
Government; and
765 
(B) the Federal Energy Regulatory Com-
mission, including under sections 205 and 206 
of the Federal Power Act. 
(2) Recommendations on reforms to the Fed-
eral Power Act that would eliminate any unneces-
sary duplication in the exercise of regulatory author-
ity or unnecessary delays in the approval (or dis-
approval) of applications for the sale, lease, or other 
disposition of public utility facilities. 
(b) MERGER REVIEW ACCOUNTABILITY.—Not later 
than 1 year after the date of enactment of this Act and 
annually thereafter, with respect to all orders issued with-
in the preceding year that impose a condition on a sale, 
lease, or other disposition of public utility facilities under 
section 203(b) of the Federal Power Act, the Federal En-
ergy Regulatory Commission shall transmit a report to 
Congress explaining each of the following: 
(1) The condition imposed. 
(2) Whether the Commission could have im-
posed such condition by exercising its authority 
under any provision of the Federal Power Act other 
than under section 203(b). 
(3) If the Commission could not have imposed 
such condition other than under section 203(b), why
766 
the Commission determined that such condition was 
consistent with the public interest. 
SEC. 1292. ELECTRIC UTILITY MERGERS. 
(a) AMENDMENT.—Section 203(a) of the Federal 
Power Act (16 U.S.C. 824b(a)) is amended to read as fol-
lows: 
‘‘(a)(1) No public utility shall, without first having 
secured an order of the Commission authorizing it to do 
so— 
‘‘(A) sell, lease, or otherwise dispose of the 
whole of its facilities subject to the jurisdiction of 
the Commission, or any part thereof of a value in 
excess of $10,000,000; 
‘‘(B) merge or consolidate, directly or indi-
rectly, such facilities or any part thereof with those 
of any other person, by any means whatsoever; or 
‘‘(C) purchase, acquire, or take any security 
with a value in excess of $10,000,000 of any other 
public utility. 
‘‘(2) No holding company in a holding company sys-
tem that includes a public utility shall purchase, acquire, 
or take any security with a value in excess of $10,000,000 
of, or, by any means whatsoever, directly or indirectly, 
merge or consolidate with, a public utility or a holding 
company in a holding company system that includes a
767 
public utility with a value in excess of $10,000,000 with-
out first having secured an order of the Commission au-
thorizing it to do so. 
‘‘(3) Upon receipt of an application for such approval 
the Commission shall give reasonable notice in writing to 
the Governor and State commission of each of the States 
in which the physical property affected, or any part there-
of, is situated, and to such other persons as it may deem 
advisable. 
‘‘(4) After notice and opportunity for hearing, the 
Commission shall approve the proposed disposition, con-
solidation, acquisition, or change in control, if it finds that 
the proposed transaction will be consistent with the public 
interest. In evaluating whether a transaction will be con-
sistent with the public interest, the Commission shall con-
sider whether the proposed transaction— 
‘‘(A) will adequately protect consumer interests; 
‘‘(B) will be consistent with competitive whole-
sale markets; 
‘‘(C) will impair the financial integrity of any 
public utility that is a party to the transaction or an 
associate company of any party to the transaction; 
and 
‘‘(D) satisfies such other criteria as the Com-
mission considers consistent with the public interest.
768 
‘‘(5) The Commission shall, by rule, adopt procedures 
for the expeditious consideration of applications for the 
approval of dispositions, consolidations, or acquisitions 
under this section. Such rules shall identify classes of 
transactions, or specify criteria for transactions, that nor-
mally meet the standards established in paragraph (4). 
The Commission shall provide expedited review for such 
transactions. The Commission shall grant or deny any 
other application for approval of a transaction not later 
than 180 days after the application is filed. If the Com-
mission does not act within 180 days, such application 
shall be deemed granted unless the Commission finds, 
based on good cause, that further consideration is required 
to determine whether the proposed transaction meets the 
standards of paragraph (4) and issues an order tolling the 
time for acting on the application for not more than 180 
days, at the end of which additional period the Commis-
sion shall grant or deny the application. 
‘‘(6) For purposes of this subsection, the terms ‘asso-
ciate company’, ‘holding company’, and ‘holding company 
system’ have the meaning given those terms in the Public 
Utility Holding Company Act of 2004.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 12 months after the date of 
enactment of this section.
769 
Subtitle I—Definitions 
SEC. 1295. DEFINITIONS. 
(a) ELECTRIC UTILITY.—Section 3(22) of the Fed-
eral Power Act (16 U.S.C. 796(22)) is amended to read 
as follows: 
‘‘(22) ELECTRIC UTILITY.—The term ‘electric 
utility’ means any person or Federal or State agency 
(including any entity described in section 201(f)) 
that sells electric energy; such term includes the 
Tennessee Valley Authority and each Federal power 
marketing administration.’’. 
(b) TRANSMITTING UTILITY.—Section 3(23) of the 
Federal Power Act (16 U.S.C. 796(23)) is amended to 
read as follows: 
‘‘(23) 
TRANSMITTING
UTILITY.—The 
term 
‘transmitting utility’ means an entity, including any 
entity described in section 201(f), that owns, oper-
ates, or controls facilities used for the transmission 
of electric energy— 
‘‘(A) in interstate commerce; or 
‘‘(B) for the sale of electric energy at 
wholesale.’’. 
(c) ADDITIONAL DEFINITIONS.—Section 3 of the 
Federal Power Act (16 U.S.C. 796) is amended by adding 
at the end the following:
770 
‘‘(26) ELECTRIC
COOPERATIVE.—The term 
‘electric cooperative’ means a cooperatively owned 
electric utility. 
‘‘(27) RTO.—The term ‘Regional Transmission 
Organization’ or ‘RTO’ means an entity of sufficient 
regional scope approved by the Commission to exer-
cise operational or functional control of facilities 
used for the transmission of electric energy in inter-
state commerce and to ensure nondiscriminatory ac-
cess to such facilities. 
‘‘(28) ISO.—The term ‘Independent System 
Operator’ or ‘ISO’ means an entity approved by the 
Commission to exercise operational or functional 
control of facilities used for the transmission of elec-
tric energy in interstate commerce and to ensure 
nondiscriminatory access to such facilities.’’. 
(d) COMMISSION.—For the purposes of this title, the 
term ‘‘Commission’’ means the Federal Energy Regu-
latory Commission. 
(e) APPLICABILITY.—Section 201(f) of the Federal 
Power Act (16 U.S.C. 824(f)) is amended by adding after 
‘‘political subdivision of a state,’’ the following: ‘‘an elec-
tric cooperative that has financing under the Rural Elec-
trification Act of 1936 (7 U.S.C. 901 et seq.) or that sells
771 
less than 4,000,000 megawatt hours of electricity per 
year,’’. 
Subtitle J—Technical and 
Conforming Amendments 
SEC. 1297. CONFORMING AMENDMENTS. 
The Federal Power Act is amended as follows: 
(1) Section 201(b)(2) of such Act (16 U.S.C. 
824(b)(2)) is amended as follows: 
(A) In the first sentence by striking ‘‘210, 
211, and 212’’ and inserting ‘‘203(a)(2), 
206(e), 210, 211, 211A, 212, 215, 216, 217, 
218, 219, 220, 221, and 222’’. 
(B) In the second sentence by striking 
‘‘210 or 211’’ and inserting ‘‘203(a)(2), 206(e), 
210, 211, 211A, 212, 215, 216, 217, 218, 219, 
220, 221, and 222’’. 
(C) Section 201(b)(2) of such Act is 
amended by striking ‘‘The’’ in the first place it 
appears and inserting ‘‘Notwithstanding section 
201(f), the’’ and in the second sentence after 
‘‘any order’’ by inserting ‘‘or rule’’. 
(2) Section 201(e) of such Act is amended by 
striking ‘‘210, 211, or 212’’ and inserting ‘‘206(e), 
206(f), 210, 211, 211A, 212, 215, 216, 217, 218, 
219, 220, 221, and 222’’.
772 
(3) Section 206 of such Act (16 U.S.C. 824e) 
is amended as follows: 
(A) In subsection (b), in the seventh sen-
tence, by striking ‘‘the public utility to make’’. 
(B) In the first sentence of subsection (a), 
by striking ‘‘hearing had’’ and inserting ‘‘hear-
ing held’’. 
(4) Section 211(c) of such Act (16 U.S.C. 
824j(c)) is amended by— 
(A) striking ‘‘(2)’’; 
(B) striking ‘‘(A)’’ and inserting ‘‘(1)’’ 
(C) striking ‘‘(B)’’ and inserting ‘‘(2)’’; 
and 
(D) striking ‘‘termination of modification’’ 
and inserting ‘‘termination or modification’’. 
(5) Section 211(d)(1) of such Act (16 U.S.C. 
824j(d)(1)) is amended by striking ‘‘electric utility’’ 
the second time it appears and inserting ‘‘transmit-
ting utility’’. 
(6) Section 315 (c) of such Act (16 U.S.C. 
825n(c)) is amended by striking ‘‘subsection’’ and 
inserting ‘‘section’’.
773 
TITLE XIII—ENERGY TAX 
INCENTIVES 
SEC. 1300. SHORT TITLE; AMENDMENT OF 1986 CODE. 
(a) SHORT TITLE.—This title may be cited as the 
‘‘Energy Tax Policy Act of 2004’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this title an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
Subtitle A—Conservation 
PART I—RESIDENTIAL AND BUSINESS PROPERTY 
SEC. 1301. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 
PROPERTY. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 (relating to nonrefundable personal 
credits) is amended by inserting after section 25B the fol-
lowing new section: 
‘‘SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to the sum of—
774 
‘‘(1) 15 percent of the qualified solar water 
heating property expenditures made by the taxpayer 
during such year, 
‘‘(2) 15 percent of the qualified photovoltaic 
property expenditures made by the taxpayer during 
such year, 
‘‘(3) 15 percent of the qualified wind energy 
property expenditures made by the taxpayer during 
such year, and 
‘‘(4) 20 percent of the qualified fuel cell prop-
erty expenditures made by the taxpayer during such 
year. 
‘‘(b) LIMITATIONS.— 
‘‘(1) MAXIMUM CREDIT.— 
‘‘(A) IN
GENERAL.—The credit allowed 
under subsection (a) shall not exceed— 
‘‘(i) $2,000 for property described in 
paragraph (1), (2), or (3) of subsection 
(c), and 
‘‘(ii) $500 for each 0.5 kilowatt of ca-
pacity of property described in subsection 
(c)(4). 
‘‘(B) PRIOR EXPENDITURES BY TAXPAYER 
ON SAME RESIDENCE TAKEN INTO ACCOUNT.— 
In determining the amount of the credit allowed
775 
to a taxpayer with respect to any dwelling unit 
under this section, the dollar amount under 
subparagraph (A)(i) with respect to each type 
of property described in such subparagraph 
shall be reduced by the credit allowed to the 
taxpayer under this section with respect to such 
property for all preceding taxable years with re-
spect to such dwelling unit. 
‘‘(2) PROPERTY STANDARDS.—No credit shall 
be allowed under this section for an item of property 
unless— 
‘‘(A) the original use of such property com-
mences with the taxpayer, 
‘‘(B) such property reasonably can be ex-
pected to remain in use for at least 5 years, 
‘‘(C) such property is installed on or in 
connection with a dwelling unit located in the 
United States and used as a residence by the 
taxpayer, 
‘‘(D) in the case of solar water heating 
property, such property is certified for perform-
ance by the non-profit Solar Rating and Certifi-
cation Corporation or a comparable entity en-
dorsed by the government of the State in which 
such property is installed,
776 
‘‘(E) in the case of fuel cell property, such 
property meets the performance and quality 
standards (if any) which have been prescribed 
by the Secretary by regulations (after consulta-
tion with the Secretary of Energy), and 
‘‘(F) in the case of any photovoltaic prop-
erty, fuel cell property, or wind energy property, 
such property meets appropriate fire and elec-
tric code requirements. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED SOLAR WATER HEATING PROP-
ERTY
EXPENDITURE.—The term ‘qualified solar 
water heating property expenditure’ means an ex-
penditure for property which uses solar energy to 
heat water for use in a dwelling unit. 
‘‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EX-
PENDITURE.—The term ‘qualified photovoltaic prop-
erty expenditure’ means an expenditure for property 
which uses solar energy to generate electricity for 
use in a dwelling unit and which is not described in 
paragraph (1). 
‘‘(3) QUALIFIED WIND ENERGY PROPERTY EX-
PENDITURE.—The term ‘qualified wind energy prop-
erty expenditure’ means an expenditure for property
777 
which uses wind energy to generate electricity for 
use in a dwelling unit. 
‘‘(4) QUALIFIED
FUEL
CELL
PROPERTY
EX-
PENDITURE.—The term ‘qualified fuel cell property 
expenditure’ means an expenditure for any qualified 
fuel cell property (as defined in section 48(c)(1)). 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) SOLAR PANELS.—No expenditure relating 
to a solar panel or other property installed as a roof 
(or portion thereof) shall fail to be treated as prop-
erty described in paragraph (1) or (2) of subsection 
(c) solely because it constitutes a structural compo-
nent of the structure on which it is installed. 
‘‘(2) SWIMMING POOLS, ETC., USED AS STOR-
AGE MEDIUM.—Expenditures which are properly al-
locable to a swimming pool, hot tub, or any other 
energy storage medium which has a function other 
than the function of such storage shall not be taken 
into account for purposes of this section. 
‘‘(3) DOLLAR AMOUNTS IN CASE OF JOINT OC-
CUPANCY.—In the case of any dwelling unit which is 
jointly occupied and used during any calendar year 
as a residence by 2 or more individuals, the fol-
lowing rules shall apply:
778 
‘‘(A) The amount of the credit allowable 
under subsection (a) by reason of expenditures 
made during such calendar year by any of such 
individuals with respect to such dwelling unit 
shall be determined by treating all of such indi-
viduals as 1 taxpayer whose taxable year is 
such calendar year. 
‘‘(B) There shall be allowable, with respect 
to such expenditures to each of such individ-
uals, a credit under subsection (a) for the tax-
able year in which such calendar year ends in 
an amount which bears the same ratio to the 
amount determined under subparagraph (A) as 
the amount of such expenditures made by such 
individual during such calendar year bears to 
the aggregate of such expenditures made by all 
of such individuals during such calendar year. 
‘‘(C) Subparagraphs (A) and (B) shall be 
applied separately with respect to expenditures 
described in paragraphs (1), (2), (3), and (4) of 
subsection (c). 
‘‘(4) TENANT-STOCKHOLDER IN COOPERATIVE 
HOUSING CORPORATION.—In the case of an indi-
vidual who is a tenant-stockholder (as defined in sec-
tion 216) in a cooperative housing corporation (as