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SEC. 1235. STANDARD MARKET DESIGN.
(a) REMAND.—The Commission’s proposed rule-
making entitled ‘‘Remedying Undue Discrimination
through Open Access Transmission Service and Standard
Electricity Market Design’’ (Docket No. RM01–12–000)
(‘‘SMD NOPR’’) is remanded to the Commission for re-
consideration. No final rule mandating a standard elec-
tricity market design pursuant to the proposed rule-
making, including any rule or order of general applica-
bility within the scope of the proposed rulemaking, may
be issued before October 31, 2006, or take effect before
December 31, 2006. Any final rule issued by the Commis-
sion pursuant to the proposed rulemaking shall be pre-
ceded by a second notice of proposed rulemaking issued
after the date of enactment of this Act and an opportunity
for public comment.
(b) SAVINGS CLAUSE.—This section shall not be con-
strued to modify or diminish any authority or obligation
the Commission has under this Act, the Federal Power
Act, or other applicable law, including, but not limited to,
any authority to—
(1) issue any rule or order (of general or par-
ticular applicability) pursuant to any such authority
or obligation; or
(2) act on a filing or filings by 1 or more trans-
mitting utilities for the voluntary formation of a Re-
560
gional Transmission Organization or Independent
System Operator (as defined in the Federal Power
Act) (and related market structures or rules) or vol-
untary modification of an existing Regional Trans-
mission Organization or Independent System Oper-
ator (and related market structures or rules).
SEC. 1236. NATIVE LOAD SERVICE OBLIGATION.
Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:
‘‘SEC. 217. NATIVE LOAD SERVICE OBLIGATION.
‘‘(a) MEETING SERVICE OBLIGATIONS.—(1) Any
load-serving entity that, as of the date of enactment of
this section—
‘‘(A) owns generation facilities, markets the
output of Federal generation facilities, or holds
rights under 1 or more wholesale contracts to pur-
chase electric energy, for the purpose of meeting a
service obligation, and
‘‘(B) by reason of ownership of transmission fa-
cilities, or 1 or more contracts or service agreements
for firm transmission service, holds firm trans-
mission rights for delivery of the output of such gen-
eration facilities or such purchased energy to meet
such service obligation,
561
is entitled to use such firm transmission rights, or, equiva-
lent tradable or financial transmission rights, in order to
deliver such output or purchased energy, or the output of
other generating facilities or purchased energy to the ex-
tent deliverable using such rights, to the extent required
to meet its service obligation.
‘‘(2) To the extent that all or a portion of the service
obligation covered by such firm transmission rights or
equivalent tradable or financial transmission rights is
transferred to another load-serving entity, the successor
load-serving entity shall be entitled to use the firm trans-
mission rights or equivalent tradable or financial trans-
mission rights associated with the transferred service obli-
gation. Subsequent transfers to another load-serving enti-
ty, or back to the original load-serving entity, shall be enti-
tled to the same rights.
‘‘(3) The Commission shall exercise its authority
under this Act in a manner that facilitates the planning
and expansion of transmission facilities to meet the rea-
sonable needs of load-serving entities to satisfy their serv-
ice obligations, and enables load-serving entities to secure
firm transmission rights (or equivalent tradable or finan-
cial rights) on a long term basis for long term power sup-
ply arrangements made, or planned, to meet such needs.
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‘‘(b) ALLOCATION
OF
TRANSMISSION
RIGHTS.—
Nothing in subsections (a)(1) and (a) (2) of this section
shall affect any existing or future methodology employed
by an RTO or ISO for allocating or auctioning trans-
mission rights if such RTO or ISO was authorized by the
Commission to allocate or auction financial transmission
rights on its system as of January 1, 2005, and the Com-
mission determines that any future allocation or auction
is just, reasonable and not unduly discriminatory or pref-
erential, provided, however, that if such an RTO or ISO
never allocated financial transmission rights on its system
that pertained to a period before January 1, 2005, with
respect to any application by such RTO or ISO that would
change its methodology the Commission shall exercise its
authority in a manner consistent with the Act and the
policies expressed in subsections (a)(1) and (a)(2) as ap-
plied to firm transmission rights held by a load serving
entity as of January 1, 2005, to the extent the associated
generation ownership or power purchase arrangements re-
main in effect.
‘‘(c) CERTAIN TRANSMISSION RIGHTS.—The Com-
mission may exercise authority under this Act to make
transmission rights not used to meet an obligation covered
by subsection (a) available to other entities in a manner