I
104TH CONGRESS
2D SESSION
H. R. 3790
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
JULY 11, 1996
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 1996’’.
(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. Antitrust laws.
Sec. 108. FERC authority for transmission.
Sec. 109. Effect on other authorities.
Sec. 110. Barriers to entry.
Sec. 111. Illegal changes in customer selections.
Sec. 112. Renewable energy.
Sec. 113. Jurisdictional determinations of transmission and local distribution
facilities.
TITLE II—PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Sec. 201. Application of the Public Utility Holding Company Act of 1935.
Sec. 202. Definitions.
Sec. 203. Application of title.
Sec. 204. Exemptions.
Sec. 205. Federal access to books and records.
Sec. 206. State access to books and records.
Sec. 207. Affiliate transactions.
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, as provided by section 3 of that Act.
(3) The term ‘‘retail electric energy services’’
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 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 establish retail elec-
tric service choice to the Commission within 6 months
after the enactment of this section. If, within such 6-
month period, the State regulatory authority notifies 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 section.
(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 each State regulated electric utility in the State shall
establish such rules as will provide for each of the follow-
ing:
(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 all 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
recovery by the facility owner or operator of all costs
incurred in connection with the local distribution
service and necessary ancillary services. The local
distribution 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) The owner or operator of the local distribu-
tion facilities shall be prohibited from using any rev-
enue from such facilities to subsidize other services.
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 State regulated electric utility retail customers shall
implement, on the effective date of retail electric service
choice for customers of State regulated utilities subject to
(4) Regulation of depreciation charges for facili-
ties used by such entity to provide retail electric en-
ergy services to such customers.
Each such State regulatory authority shall also cease to
carry out the activities referred to in paragraphs (1)
through (4), and cease to implement subsection (c), with
respect to any retail electric energy service provided within
a geographic area by a State regulated electric utility that
is providing local distribution services within such area if
the State regulatory authority determines that such serv-
ice is subject to effective competition.
(e) EARLIER ADOPTION OF CUSTOMER CHOICE.—
Nothing in this title shall be construed to prohibit any
State regulatory authority from establishing or enforcing
any rules or regulations relating to retail electric service
competition prior to December 15, 2000, or to require any
State regulatory authority to establish or enforce any rules
or regulations relating to retail electric service competition
prior to December 15, 2000.
(f) CONSIDERATION OF CERTAIN TERMS AND CONDI-
TIONS.—Each State regulatory authority that makes an
election to establish retail electric service choice for State
regulated electric utility retail customers shall consider
each of the following terms and conditions and make a
determination concerning whether or not it is appropriate
to apply such terms and conditions to the local distribution
or sale of retail electric energy services to carry out the
purposes of this Act:
(1) Terms and conditions intended to insure
that adequate electric service is available on a com-
petitively neutral and nondiscriminatory basis to all
customers served by the retail distribution system
concerned.
(2) Terms and conditions designed to ensure
and enhance the reliability of electric service to all
electric energy consumers.
(3) Terms and conditions allowing any electric
utility subject to the ratemaking jurisdiction of such
State regulatory authority to recover costs incurred
prior to July 11, 1996.
(4) Terms and conditions to promote electric
energy efficiency, conservation, and environmental
programs.
Such terms and conditions may only be imposed on a non-
discriminatory and competitively neutral basis.
SEC. 104. RETAIL COMPETITION FOR NONREGULATED
ELECTRIC UTILITIES.
(a) NONREGULATED UTILITY ELECTION.—A non-
regulated electric utility may elect to establish retail elec-
tric service choice for its customers. Such election shall
be made through submission of a notice to establish retail
electric service choice to the State regulatory authority for
the State in which such nonregulated utility is located
within 6 months after the enactment of this section. If,
within such 6-month period, the utility notifies the State
regulatory authority that additional legislative authority is
needed in order for the utility to make such an election,
the 6 month date shall be extended to a date 2 years after
the enactment of this section. If a nonregulated electric
utility does not elect to establish retail electric service
choice for its customers within the required period, such
utility shall be subject to the election made under section
103 by the State regulatory authority that has ratemaking
authority for State regulated electric utilities in the State.
(b) CUSTOMER CHOICE AND NONDISCRIMINATORY
ACCESS.—If a nonregulated electric utility elects to estab-
lish retail electric service choice for its retail electric cus-
tomers, the utility shall establish such rules as will provide
for each of the following:
(1) All nonregulated electric utility retail cus-
tomers of the utility shall be able to purchase retail
electric energy services from any person offering to
provide those services to such customers.
(2) Any person seeking to provide retail electric
energy services to such customers shall have reason-
able and nondiscriminatory access on an unbundled
basis, for the purposes of providing such services, to
all local distribution facilities owned or operated by
the utility. 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 recovery by the utility of all
costs incurred in connection with the local distribu-
tion services and necessary associated services. The
local distribution 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) The utility shall be prohibited from using
any revenue from local distribution facilities to sub-
sidize retail electric services provided by such utility
to any person.
The nonregulated electric utility shall establish an effec-
tive date for the application of the requirements set forth
in paragraphs (1) through (3). 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) EARLIER ADOPTION OF CUSTOMER CHOICE.—
Nothing in this title shall be construed to prohibit any
nonregulated utility from establishing or enforcing any
rules or regulations relating to retail electric service com-
petition prior to December 15, 2000, or to require any
nonregulated utility to establish or enforce any rules or
regulations relating to retail electric service competition
prior to December 15, 2000.
(d) CONSIDERATION OF CERTAIN TERMS AND CON-
DITIONS.—Each nonregulated electric utility that makes
an election to establish retail electric service choice for its
customers shall consider each of the following terms and
conditions and make a determination concerning whether
or not it is appropriate to apply such terms and conditions
to the local distribution or sale of retail electric energy
services to carry out the purposes of this Act:
(1) Terms and conditions intended to insure
that adequate electric service is available on a com-
petitively neutral and nondiscriminatory basis to all
customers served by the retail electric distribution
system concerned.
(2) Terms and conditions designed to ensure
and enhance the reliability of electric service to all
retail electric customers of the utility.
(3) Terms and conditions allowing the nonregu-
lated electric utility to recover investment costs in-
curred prior to July 11, 1996.
(4) Terms and conditions to promote electric
energy efficiency, conservation, and environmental
programs.
Such terms and conditions may only be imposed on a non-
discriminatory and competitively neutral basis.
(e) PREFERENCE POWER.—No person may resell
electric energy purchased by such person pursuant to a
long-term firm power contract from any Federal power
marketing authority to any other person not directly
served by retail distribution facilities owned or operated
by such person.
SEC. 105. JURISDICTION OF STATE COURTS.
In addition to the prohibitions on Federal court juris-
diction set forth in section 1342 of title 28, notwithstand-
ing any other provision of law, no court of the United
States shall have jurisdiction over any action arising under
any provision of section 102, 103, 104, or 110 except for
review of any action in the Supreme Court of the United
States in accordance with sections 1257 and 1258 of title
28 of the United States Code. Any person may bring an
action in the appropriate State court to enforce the re-
quirements of sections 102, 103, 104, and 110. Except
for Supreme Court review, any appeal, review, or other
action in State court shall be pursuant to any applicable
State procedures.
SEC. 106. FERC AUTHORITY FOR CERTAIN UTILITIES.
(a) IN GENERAL.—If an election under section 103
or 104 to establish retail electric service choice is not made
by the date set forth in section 103(a) or 104(a) for a
State regulated or a nonregulated electric utility, the Com-
mission shall exercise the authorities that would otherwise
be exercised by the State regulatory authority or nonregu-
lated electric utility under section 103 and 104 as if such
election had been made by such date. The exercise of such
authorities pursuant to this section shall preempt any
State law that is inconsistent with the exercise of such
authorities.
(b) STATES WITHOUT STATE REGULATORY AU-
THORITIES.—For any State without a State regulatory
authority exercising ratemaking jurisdiction over State
regulated electric utilities, if a nonregulated electric utility
elects not to establish retail electric service choice for its
customers or fails to submit an election within the re-
quired period, the Commission shall exercise the authori-
ties of section 104 that would otherwise be exercised by
the nonregulated electric utility if the nonregulated elec-
tric utility had elected to establish retail electric service
choice.
(c) FEDERAL COURTS.—The provisions of section
105 (relating to jurisdiction of State courts) shall not
apply to any action arising under this section. Any person
aggrieved by any action of the Commission pursuant to
this section may bring an action in the appropriate United
States district court for appropriate relief.
SEC. 107. 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. 108. 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. 109. 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. 110. BARRIERS TO ENTRY.
(a) NONDISCRIMINATORY ACCESS.—After the effec-
tive date for retail electric choice (as determined under
section 103 or 104) for an electric utility, no State or local
legal requirement (other than a facility siting requirement)
may prohibit or have the effect of prohibiting any entity
from offering to any electric utility retail customer of such
utility any retail service related to electric energy or from
providing any retail electric energy service directly or indi-
rectly to any such customer.
(b) STATE REGULATORY AUTHORITY.—A State may,
under State law, impose requirements relating to retail
electric energy services necessary to preserve universal
service, protect public safety and welfare, ensure the con-
tinued quality of electric services and safeguard the rights
to consumers 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. 111. 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 electric energy services except in accordance
with such verification procedures as the Commission shall
prescribe. Nothing in this section shall preclude any State
regulatory authority from proscribing such additional pro-
cedures regarding changes in customer selection with re-
spect 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 electric energy service
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. 112. RENEWABLE ENERGY.
(a) MINIMUM RENEWABLE GENERATION REQUIRE-
MENT.—For calendar years after the effective date for re-
tail electric choice (as determined under section 103) for
State regulated electric utilities in any State, each electric
generator in the State 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. Nothing in this
section shall be construed to prohibit any State from re-
quiring additional renewable energy generation in that
State under any program adopted by the State.
(b) REQUIRED ANNUAL PERCENTAGE.—From the
first calendar year following the effective date for retail
electric choice (as determined under section 103) for State
regulated electric utilities in a State through calendar year
2004, the required annual percentage for each electric
generator in the State shall be 2 percent. Thereafter the
required annual percentage for each such generator shall
be as set forth in the following table :
Minimum
Calendar year:
Percentage:
2005 .........................................................................................
2010 .........................................................................................
(c) SUBMISSION OF CREDITS.—An electric generator
may satisfy the requirements of subsection (a) through the
submission of—
(1) Renewable Energy Credits issued by the
Commission under this section for renewable energy
generated by such electric generator in such cal-
endar year.
(2) Renewable Energy Credits issued by the
Commission under this section to any other electric
generator for renewable energy generated in such
calendar year by such other generator and acquired
by such electric generator.
(3) Any combination of the foregoing.
A Renewable Energy Credit that is submitted to the Com-
mission for any year may not be used for any other pur-
poses thereafter.
(d) ISSUANCE OF RENEWABLE ENERGY CREDITS.—
(1) IN GENERAL.—The Commission shall estab-
lish, by rule after notice and opportunity for hearing
but not later than 120 days after the enactment of
this Act, a program to issue Renewable Energy
Credits to electric generators. Renewable Energy
Credits shall be identified by type of generation and
facility location (State). Under such program, the
Commission shall issue one Renewable Energy Cred-
it to any person who generates in any State (in any
year after the calendar year after the effective date
for retail electric choice (as determined under sec-
tion 103) for State regulated electric utilities in the
State) one unit of electric energy through the use of
renewable energy generation.
(2) FEES.—The Commission shall impose and
collect a fee on recipients of Renewable Energy
Credits in an amount equal to the administrative
costs of issuing, recording, monitoring the sale or ex-
change, and tracking of such credits. The failure or
refusal of any person to pay such fee shall be subject
to a civil penalty equal to 2 and one-half times the
amount of the unpaid fees. The Commission shall
bring an action in the appropriate United States dis-
trict court to collect any unpaid fees and to impose
a civil penalty on any person who fails or refuses to
pay such fee imposed under this section.
(3) PURPA CONTRACTS.—In the case of renew-
able energy sold by the generator to an electric util-
ity under a contract (including but not limited to a
contract entered into before the date of enactment of
this Act) that is subject to section 210 of the Public
Utility Regulatory Policies Act of 1978, for the du-
ration of such contract, the utility shall be treated
for purposes of the other provisions of this section
as the generator of such energy unless such genera-
tor and utility agree to terminate such contract prior
to the expiration date set forth in the contract.
(e) SALE OR EXCHANGE.—Renewable Energy Credits
may be sold or exchanged by the person to whom issued
or by any other person who acquires the credit. A Renew-
able Energy Credit for any year that is not used to satisfy
the minimum renewable generation requirement of sub-
section (a) for that year may be not be carried forward
for use in another year. The Commission shall promulgate
regulations to provide for the issuance, recording, monitor-
ing the sale or exchange, and tracking of such credits. The
Commission shall maintain records of all sales and ex-
changes of credits. No such sale or exchange shall be valid
unless recorded by the Commission.
(f) ENFORCEMENT.—The Commission shall bring an
action in the appropriate United States district court to
impose a civil penalty on any person who fails or refuses
to comply with subsection (a). The failure or refusal of
any person to submit any required quantity of Renewable
Energy Credits shall be subject to a civil penalty of not
more than 2 and one-half times the estimated national av-
erage market value (as determined by the Commission)
for the calendar year concerned of such quantity of Re-
newable Energy Credits.
(g) RULES
AND REGULATIONS.—The Commission
shall promulgate such rules and regulations as may be
necessary to carry out this section, including such rules
and regulations requiring the submission of such informa-
tion as may be necessary to verify the annual electric en-
ergy generation and renewable energy generation of any
person applying for Renewable Energy Credits under this
section or to verify and audit the validity of Renewable
Energy Credits submitted by any person to the Commis-
sion.
(h) ANNUAL REPORTS.—The Commission shall gath-
er available data and devise measures to gauge compliance
with the requirements of this section and the success of
the National Renewable Energy Trading Program estab-
lished under this section. On an annual basis not later
than May 31 of each year, the Commission shall publish
a report for the previous year that includes compliance
data, National Renewable Energy Trading Program re-
sults, and steps taken to improve the Program results.
(i) SUNSET.—The requirements of this section shall
cease to apply 90 days after the Commission certifies in
the annual report under subsection (h) that for the preced-
ing year the market value of Renewable Energy Credits
or the number of credits traded or both has declined to
such nominal levels that the costs incurred by the Com-
mission for issuance, recording, monitoring sale or ex-
change, and tracking of credits is no longer justified.
SEC. 113. JURISDICTIONAL DETERMINATIONS OF TRANS-
MISSION AND LOCAL DISTRIBUTION FACILI-
TIES.
Section 201(b) of the Federal Power Act is amended
by inserting the following new paragraphs after paragraph
(1) and redesignating paragraph (2) as paragraph (7):
‘‘(2)(A) Any person that provides unbundled retail
transmission or distribution of electric energy in interstate
commerce shall obtain a jurisdictional determination from
the Commission as to which facilities owned, controlled,
or operated by such person are or will be facilities used
for retail transmission in interstate commerce and there-
fore subject to Commission jurisdiction, and which facili-
ties are or will be used for local distribution and therefore
subject to State jurisdiction.
‘‘(B) A person providing services referred to in sub-
paragraph (A) as of the date of enactment of this para-
graph shall file, within 90 days of the date of enactment
of this paragraph, an application for jurisdictional deter-
mination under this paragraph. The Commission, after
consultation with representatives of affected State com-
missions, shall make a jurisdictional determination with
respect to the facilities of such person no later than 18
months after the date the application is filed.
‘‘(C) A person that first provides services referred to
in subparagraph (A) after the date of enactment of this
paragraph shall file an application for jurisdictional deter-
mination under this paragraph no later than 90 days prior
to the date that unbundled retail transmission or distribu-
tion service is to commence. The Commission, after con-
sultation with representatives of the affected State com-
missions, shall make a determination with respect to the
facilities of such person no later than 1 year after the date
the application is filed.
‘‘(3) In making a jurisdictional determination under
paragraph (2), the Commission shall consider the follow-
ing nonexclusive list of factors as indicating that facilities
constitute local distribution facilities subject to State ju-
risdiction:
‘‘(A) Local distribution facilities normally are in
close proximity to retail customers.
‘‘(B) Local distribution facilities are primarily
radial in character.
‘‘(C) Power flows into, but rarely out of, local
distribution systems.
‘‘(D) When power enters a local distribution
system, it is not reconsigned or transported on to
some other market.
‘‘(E) Power entering a local distribution system
is consumed in a comparatively restricted geographi-
cal area.
‘‘(F) Meters are based at the transmission/local
distribution interface to measure flows into the local
distribution system.
‘‘(G) Local distribution systems will be of re-
duced voltage.
The Commission shall also consider the historical uses of
facilities used to deliver electric energy to end users and
other technical factors that may be relevant to a jurisdic-
tional determination. The Commission shall give deference
to State commission recommendations that take into ac-
count the factors described in this subsection and shall
take into account other factors identified by a State com-
mission as relevant to a jurisdictional determination with
respect to facilities located in such State.
‘‘(4) Once the Commission makes a jurisdictional de-
termination under paragraph (2), such determination may
not be modified unless the Commission determines there
is a material change in facts or circumstances since the
time the prior determination was made, or finds that prior
representations or facts were incorrect. The Commission
may modify a prior jurisdictional determination only after
consultation with representatives of the affected State
commission.
‘‘(5) Any person, State, or State commission ag-
grieved by an order making a jurisdictional determination
under paragraph (2) may obtain a review of such order
in the Circuit Court of Appeals of the United States for
any circuit wherein the person to which the order relates
is located or has its principal place of business or in the
United States Court of Appeals for the District of Colum-
bia Circuit, pursuant to section 313.’’
TITLE II—PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935
SEC. 201. APPLICATION OF THE PUBLIC UTILITY HOLDING
COMPANY ACT OF 1935.
The Public Utility Holding Company Act of 1935
shall cease to apply to any public utility company and to
any holding company of such public utility company if
each State in which such public utility company is provid-
ing retail electric or natural gas distribution service and
each State in which any subsidiary, affiliate, or associate
company of such public utility company and of such hold-
ing company is providing retail electric or natural gas dis-
tribution service—
(1) determines that the retail customers of such
public utility company and of each such subsidiary,
affiliate, or associate company are able to purchase
at retail electric energy services and natural gas
from any person offering those services to the pur-
chaser on a competitively neutral and nondiscrim-
inatory basis; and
(2) notifies the Commission and the Securities
and Exchange Commission of such determination.
SEC. 202. DEFINITIONS.
For purposes of this title:
(1) The term ‘‘person’’ means an individual or
company.
(2) The term ‘‘company’’ means a corporation,
joint stock company, partnership, association, busi-
ness trust, organized group of persons, whether in-
corporated or not, or a receiver or receivers, trustee
or trustees of any of the foregoing.
(3) 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.
(4) The term ‘‘gas utility company’’ means any
company that owns or operates facilities used for the
distribution at retail (other than the distribution
only in enclosed portable containers) of natural or
manufactured gas for heat, light, or power.
(5) The term ‘‘public utility company’’ means
an electric utility company or a gas utility company
but does not mean a qualifying facility as defined in
the Public Utility Regulatory Policies Act of 1978,
or an exempt wholesale generator or a foreign utility
company as defined by the Energy Policy Act of
1992.
(6) The term ‘‘holding company’’ means (A)
any company that directly or indirectly owns, con-
trols, or holds with power to vote, 10 percent or
more of the outstanding voting securities of a public
utility company or of a holding company of any pub-
lic utility company; and (B) any person, determined
by the Commission, after notice and opportunity for
hearing, to exercise directly or indirectly (either
alone or pursuant to an arrangement or understand-
ing with 1 or more other persons) such a controlling
influence over the management or policies of any
public utility or holding company as to make it nec-
essary or appropriate for the protection of consum-
ers with respect to rates that such person be subject
to the obligations, duties, and liabilities imposed in
this title upon holding companies.
(7) 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
with power to vote, by such holding company; and
(B) any person the management or policies of which
the Commission, after notice and opportunity for
hearing, determines to be subject to a controlling in-
fluence, directly or indirectly, by such holding com-
pany (either alone or pursuant to an arrangement or
understanding with 1 or more other persons) so as
to make it necessary or appropriate for the protec-
tion of consumers with respect to rates that such
person be subject to the obligations, duties, and li-
abilities imposed in this title upon subsidiary compa-
nies of holding companies.
(8) The term ‘‘holding company system’’ means
a holding company together with its subsidiary com-
panies.
(9) The term ‘‘associate company’’ of a com-
pany means any company in the same holding com-
pany system with such company.
(10) The term ‘‘affiliate’’ of a company means
(A) any company 5 percent or more of whose out-
standing voting securities are owned, controlled, or
held with power to vote, directly or indirectly, by
such company; and (B) any person or class of per-
sons that the Commission determines, after appro-
priate notice and opportunity for hearing, to stand
in such relation, directly or indirectly, to such com-
pany that there is likely to be such an absence of
arm’s length bargaining in transactions between
them as to make it necessary or appropriate in the
public interest or for the protection of consumers
that such person be subject to the obligations, du-
ties, and liabilities imposed in this title upon affili-
ates of a company.
(11) 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.
(12) The term ‘‘Commission’’ means the Fed-
eral Energy Regulatory Commission.
(13) 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 law of
such State has jurisdiction to regulate public utility
companies.
SEC. 203. APPLICATION OF TITLE.
No provision in this title 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 of the foregoing, or of any corporation that is
wholly owned, directly or indirectly by 1 or more of
the foregoing, or
(5) any officer, agent, or employee of any of the
foregoing acting as such in the course of his official
duty.
SEC. 204. EXEMPTION AUTHORITY.
(a) RULEMAKING.—Not later than 90 days after the
enactment of this Act, the Commission shall promulgate
a final rule to exempt from the requirements of section
205 any person that is a holding company, solely with re-
spect to—
(1) one or more qualifying facilities under the
Public Utility Regulatory Policies Act of 1978;
(2) one or more exempt wholesale generators;
or
(3) one or more 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 company, or if the Commission finds that any
class of transactions is not relevant to the jurisdictional
rates of a public utility company, the Commission shall
exempt such person or transaction from the requirements
of section 205.
SEC. 205. FEDERAL ACCESS TO BOOKS AND RECORDS.
(a) HOLDING
COMPANIES
AND
SUBSIDIARIES.—
Every holding company and associate company thereof
shall maintain, and make available to the Commission,
such books, records, accounts, and other documents as the
Commission deems relevant to costs incurred by a public
utility company that is an associate company of such hold-
ing company and necessary or appropriate for the protec-
tion of consumers with respect to rates.
(b) AFFILIATES AND SUBSIDIARIES.—Every affiliate
of a holding company or of any subsidiary company there-
of shall maintain, and make available to the Commission,
such books, records, accounts, and other documents with
respect to any transaction that is subject to this title, as
the Commission deems relevant to costs incurred by a pub-
lic utility company that is an associate company of such
holding company and necessary or appropriate for the pro-
tection of consumers with respect to rates.
(c) AUTHORITY TO EXAMINE.—The Commission
may examine the books, records, accounts, and other docu-
ments of any company in a holding company system, or
any affiliate thereof, as the Commission deems relevant
to costs incurred by a public utility company within such
holding company system and necessary or appropriate for
the protection of consumers with respect to rates. No
member, officer, or employee of the Commission shall di-
vulge any fact or information that may come to his knowl-
edge during the course of examination of books, records,
accounts, or other documents as hereinbefore provided, ex-
cept insofar as he may be directed by the Commission or
by a court.
(d) OTHER AUTHORITY.—Nothing in this section
shall be construed to limit the Commission’s authority
under section 301 of the Federal Power Act.
SEC. 206. STATE ACCESS TO BOOKS AND RECORDS.
(a) AUTHORITY.—Upon the written request of a
State commission having jurisdiction to regulate a public
utility company in a holding company system, and subject
to such terms and conditions as may be necessary and ap-
propriate to safeguard against unwarranted disclosure to
the public of any trade secrets or sensitive commercial in-
formation, a holding company or its associate company or
affiliate thereof, wherever located, shall produce for in-
spection such books, records, accounts, and other docu-
ments as have been identified in reasonable detail in a pro-
ceeding before the State commission and as are relevant
to costs incurred by such public utility company and are
necessary for the effective discharge of the State commis-
sion’s responsibilities with respect to such proceeding.
(b) SAVINGS.—Nothing in this section shall preempt
applicable State law concerning the provision of books,
records, accounts, and other documents, or in any way
limit State’s rights to obtain books, records, accounts, and
other documents under Federal law, contracts, or other-
wise.
SEC. 207. 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 may recover in rates any costs of
an activity performed by an associate company, or any
costs of goods or services acquired by such public utility
company from an associate company.
SEC. 208. EFFECT ON OTHER REGULATION.
Nothing in this title shall preclude a State commis-
sion from exercising its jurisdiction under otherwise appli-
cable law to protect utility consumers.
SEC. 209. ENFORCEMENT.
The Commission shall have the same powers as set
forth in sections 206 through 317 of the Federal Power
Act (16 U.S.C. 825d–825p) to enforce the provisions of
this Act.
SEC. 210. SAVING PROVISION.
Nothing in this title prohibits a person from engaging
in activities in which it is legally engaged or authorized
to engage on the date on which the Public Utility Holding
Company Act of 1935 ceases to apply to such person pur-
suant to this title, provided that it complies with the terms
of any authorization, whether by rule or by order.
SEC. 211. IMPLEMENTATION.
The Commission shall promulgate regulations nec-
essary or appropriate to implement this title not later than
one year after the date of enactment of this title.
SEC. 212. TRANSFERS.
All books, records, accounts, and other documents
that relate primarily to the functions hereby vested in this
Commission 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.
TITLE III—PUBLIC UTILITY REG-
ULATORY POLICIES ACT OF
1978
SEC. 301. APPLICATION OF PURPA PROVISIONS.
Section 210 of the Public Utility Regulatory Policies
Act of 1978 is amended by adding the following new sub-
section at the end thereof:
‘‘(m) UTILITIES SUBJECT
TO RETAIL COMPETI-
TION.—
‘‘(1) IN GENERAL.—The preceding provisions of
this section requiring electric utilities to offer to pur-
chase electric energy from qualifying cogeneration
facilities and qualifying small power production fa-
cilities at the incremental cost to the utility of alter-
native electric energy shall not apply to an electric
utility if the State—
‘‘(A) determines that the retail customers
of such utility are able to purchase retail elec-
tric energy services (as defined in the Electric
Consumers’ Power to Choose Act of 1996) from
any person offering those services to the pur-
chaser on a competitively neutral and non-
discriminatory basis; and
‘‘(B) notifies the Commission of such de-
termination.
‘‘(2) RIGHTS AND REMEDIES NOT AFFECTED.—
Nothing in the Electric Consumers’ Power to Choose
Act of 1996 affects the rights or remedies of any
party with respect to the purchase or sale of electric
energy or capacity from or to a facility determined
to be a qualifying small power production facility or
a qualifying cogeneration facility pursuant to this
Act pursuant to any contract in effect on July 11,
1996.’’.
Æ