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Organization never allocated financial transmission rights on its 
system that pertained to a period before January 1, 2005, with 
respect to any application by such Transmission Organization that 
would change its methodology the Commission shall exercise its 
authority in a manner consistent with the Act and that takes 
into account the policies expressed in subsections (b)(1), (b)(2), 
and (b)(3) as applied 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 remain in 
effect. 
‘‘(d) CERTAIN TRANSMISSION RIGHTS.—The Commission may 
exercise authority under this Act to make transmission rights not 
used to meet an obligation covered by subsection (b) available 
to other entities in a manner determined by the Commission to 
be just, reasonable, and not unduly discriminatory or preferential. 
‘‘(e) OBLIGATION
TO BUILD.—Nothing in this Act relieves a 
load-serving entity from any obligation under State or local law 
to build transmission or distribution facilities adequate to meet 
the service obligations of the load-serving entity. 
‘‘(f) CONTRACTS.—Nothing in this section shall provide a basis 
for abrogating any contract or service agreement for firm trans-
mission service or rights in effect as of the date of the enactment 
of this subsection. If an ISO in the Western Interconnection had 
allocated financial transmission rights prior to the date of enact-
ment of this section but had not done so with respect to one 
or more load-serving entities’ firm transmission rights held under 
contracts to which the preceding sentence applies (or held by reason 
of ownership or future ownership of transmission facilities), such 
load-serving entities may not be required, without their consent, 
to convert such firm transmission rights to tradable or financial 
rights, except where the load-serving entity has voluntarily joined 
the ISO as a participating transmission owner (or its successor) 
in accordance with the ISO tariff. 
‘‘(g) WATER PUMPING FACILITIES.—The Commission shall ensure 
that any entity described in section 201(f) that owns transmission 
facilities used predominately to support its own water pumping 
facilities shall have, with respect to the facilities, protections for 
transmission service comparable to those provided to load-serving 
entities pursuant to this section. 
‘‘(h) ERCOT.—This section shall not apply within the area 
referred to in section 212(k)(2)(A). 
‘‘(i) JURISDICTION.—This section does not authorize the Commis-
sion to take any action not otherwise within the jurisdiction of 
the Commission. 
‘‘(j) TVA AREA.—(1) Subject to paragraphs (2) and (3), for pur-
poses of subsection (b)(1)(B), a load-serving entity that is located 
within the service area of the Tennessee Valley Authority and 
that has a firm wholesale power supply contract with the Tennessee 
Valley Authority shall be considered to hold firm transmission 
rights for the transmission of the power provided. 
‘‘(2) Nothing in this subsection affects the requirements of 
section 212(j). 
‘‘(3) The Commission shall not issue an order on the basis 
of this subsection that is contrary to the purposes of section 212(j). 
‘‘(k) EFFECT OF EXERCISING RIGHTS.—An entity that to the 
extent required to meet its service obligations exercises rights
H. R. 6—367
described in subsection (b) shall not be considered by such action 
as engaging in undue discrimination or preference under this Act.’’. 
(b) FERC RULEMAKING ON LONG-TERM TRANSMISSION RIGHTS 
IN ORGANIZED MARKETS.—Within 1 year after the date of enactment 
of this section and after notice and an opportunity for comment, 
the Commission shall by rule or order, implement section 217(b)(4) 
of the Federal Power Act in Transmission Organizations, as defined 
by that Act with organized electricity markets. 
SEC. 1234. STUDY ON THE BENEFITS OF ECONOMIC DISPATCH. 
(a) STUDY.—The Secretary, in coordination and consultation 
with the States, shall conduct a study on— 
(1) the procedures currently used by electric utilities to 
perform economic dispatch; 
(2) identifying possible revisions to those procedures to 
improve the ability of nonutility generation resources to offer 
their output for sale for the purpose of inclusion in economic 
dispatch; and 
(3) the potential benefits to residential, commercial, and 
industrial electricity consumers nationally and in each State 
if economic dispatch procedures were revised to improve the 
ability of nonutility generation resources to offer their output 
for inclusion in economic dispatch. 
(b) DEFINITION.—The term ‘‘economic dispatch’’ when used in 
this section means the operation of generation facilities to produce 
energy at the lowest cost to reliably serve consumers, recognizing 
any operational limits of generation and transmission facilities. 
(c) REPORT TO CONGRESS AND THE STATES.—Not later than 
90 days after the date of enactment of this Act, and on a yearly 
basis following, the Secretary shall submit a report to Congress 
and the States on the results of the study conducted under sub-
section (a), including recommendations to Congress and the States 
for any suggested legislative or regulatory changes. 
SEC. 1235. PROTECTION OF TRANSMISSION CONTRACTS IN THE 
PACIFIC NORTHWEST. 
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is 
amended by adding at the end the following: 
‘‘SEC. 218. PROTECTION OF TRANSMISSION CONTRACTS IN THE 
PACIFIC NORTHWEST. 
‘‘(a) DEFINITION OF ELECTRIC UTILITY OR PERSON.—In this sec-
tion, the term ‘electric utility or person’ means an electric utility 
or person that— 
‘‘(1) as of the date of enactment of the Energy Policy Act 
of 2005 holds firm transmission rights pursuant to contract 
or by reason of ownership of transmission facilities; and 
‘‘(2) is located— 
‘‘(A) in the Pacific Northwest, as that region is defined 
in section 3 of the Pacific Northwest Electric Power Plan-
ning and Conservation Act (16 U.S.C. 839a); or 
‘‘(B) in that portion of a State included in the 
geographic area proposed for a regional transmission 
organization in Commission Docket Number RT01–35 on 
the date on which that docket was opened. 
‘‘(b) PROTECTION
OF TRANSMISSION CONTRACTS.—Nothing in 
this Act confers on the Commission the authority to require an 
electric utility or person to convert to tradable or financial rights—