H. R. 6—349
‘‘(5) The term ‘Interconnection’ means a geographic area 
in which the operation of bulk-power system components is 
synchronized such that the failure of one or more of such 
components may adversely affect the ability of the operators 
of other components within the system to maintain reliable 
operation of the facilities within their control. 
‘‘(6) The term ‘transmission organization’ means a Regional 
Transmission Organization, Independent System Operator, 
independent transmission provider, or other transmission 
organization finally approved by the Commission for the oper-
ation of transmission facilities. 
‘‘(7) The term ‘regional entity’ means an entity having 
enforcement authority pursuant to subsection (e)(4). 
‘‘(8) The term ‘cybersecurity incident’ means a malicious 
act or suspicious event that disrupts, or was an attempt to 
disrupt, the operation of those programmable electronic devices 
and communication networks including hardware, software and 
data that are essential to the reliable operation of the bulk 
power system. 
‘‘(b) JURISDICTION
AND APPLICABILITY.—(1) The Commission 
shall have jurisdiction, within the United States, over the ERO 
certified by the Commission under subsection (c), any regional 
entities, and all users, owners and operators of the bulk-power 
system, including but not limited to the entities described in section 
201(f), for purposes of approving reliability standards established 
under this section and enforcing compliance with this section. All 
users, owners and operators of the bulk-power system shall comply 
with reliability standards that take effect under this section. 
‘‘(2) The Commission shall issue a final rule to implement 
the requirements of this section not later than 180 days after 
the date of enactment of this section. 
‘‘(c) CERTIFICATION.—Following the issuance of a Commission 
rule under subsection (b)(2), any person may submit an application 
to the Commission for certification as the Electric Reliability 
Organization. The Commission may certify one such ERO if the 
Commission determines that such ERO— 
‘‘(1) has the ability to develop and enforce, subject to sub-
section (e)(2), reliability standards that provide for an adequate 
level of reliability of the bulk-power system; and 
‘‘(2) has established rules that— 
‘‘(A) assure its independence of the users and owners 
and operators of the bulk-power system, while assuring 
fair stakeholder representation in the selection of its direc-
tors and balanced decisionmaking in any ERO committee 
or subordinate organizational structure; 
‘‘(B) allocate equitably reasonable dues, fees, and other 
charges among end users for all activities under this sec-
tion; 
‘‘(C) provide fair and impartial procedures for enforce-
ment of reliability standards through the imposition of 
penalties in accordance with subsection (e) (including 
limitations on activities, functions, or operations, or other 
appropriate sanctions); 
‘‘(D) provide for reasonable notice and opportunity for 
public comment, due process, openness, and balance of 
interests in developing reliability standards and otherwise 
exercising its duties; and
H. R. 6—350
‘‘(E) provide for taking, after certification, appropriate 
steps to gain recognition in Canada and Mexico. 
‘‘(d) RELIABILITY
STANDARDS.—(1) The Electric Reliability 
Organization shall file each reliability standard or modification 
to a reliability standard that it proposes to be made effective under 
this section with the Commission. 
‘‘(2) The Commission may approve, by rule or order, a proposed 
reliability standard or modification to a reliability standard if it 
determines that the standard is just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. The 
Commission shall give due weight to the technical expertise of 
the Electric Reliability Organization with respect to the content 
of a proposed standard or modification to a reliability standard 
and to the technical expertise of a regional entity organized on 
an Interconnection-wide basis with respect to a reliability standard 
to be applicable within that Interconnection, but shall not defer 
with respect to the effect of a standard on competition. A proposed 
standard or modification shall take effect upon approval by the 
Commission. 
‘‘(3) The Electric Reliability Organization shall rebuttably pre-
sume that a proposal from a regional entity organized on an Inter-
connection-wide basis for a reliability standard or modification to 
a reliability standard to be applicable on an Interconnection-wide 
basis is just, reasonable, and not unduly discriminatory or pref-
erential, and in the public interest. 
‘‘(4) The Commission shall remand to the Electric Reliability 
Organization for further consideration a proposed reliability 
standard or a modification to a reliability standard that the 
Commission disapproves in whole or in part. 
‘‘(5) The Commission, upon its own motion or upon complaint, 
may order the Electric Reliability Organization to submit to the 
Commission a proposed reliability standard or a modification to 
a reliability standard that addresses a specific matter if the 
Commission considers such a new or modified reliability standard 
appropriate to carry out this section. 
‘‘(6) The final rule adopted under subsection (b)(2) shall include 
fair processes for the identification and timely resolution of any 
conflict between a reliability standard and any function, rule, order, 
tariff, rate schedule, or agreement accepted, approved, or ordered 
by the Commission applicable to a transmission organization. Such 
transmission organization shall continue to comply with such func-
tion, rule, order, tariff, rate schedule or agreement accepted, 
approved, or ordered by the Commission until— 
‘‘(A) the Commission finds a conflict exists between a reli-
ability standard and any such provision; 
‘‘(B) the Commission orders a change to such provision 
pursuant to section 206 of this part; and 
‘‘(C) the ordered change becomes effective under this part. 
If the Commission determines that a reliability standard needs 
to be changed as a result of such a conflict, it shall order the 
ERO to develop and file with the Commission a modified reliability 
standard under paragraph (4) or (5) of this subsection. 
‘‘(e) ENFORCEMENT.—(1) The ERO may impose, subject to para-
graph (2), a penalty on a user or owner or operator of the bulk-
power system for a violation of a reliability standard approved 
by the Commission under subsection (d) if the ERO, after notice 
and an opportunity for a hearing—
H. R. 6—351
‘‘(A) finds that the user or owner or operator has violated 
a reliability standard approved by the Commission under sub-
section (d); and 
‘‘(B) files notice and the record of the proceeding with 
the Commission. 
‘‘(2) A penalty imposed under paragraph (1) may take effect 
not earlier than the 31st day after the ERO files with the Commis-
sion notice of the penalty and the record of proceedings. Such 
penalty shall be subject to review by the Commission, on its own 
motion or upon application by the user, owner or operator that 
is the subject of the penalty filed within 30 days after the date 
such notice is filed with the Commission. Application to the Commis-
sion for review, or the initiation of review by the Commission 
on its own motion, shall not operate as a stay of such penalty 
unless the Commission otherwise orders upon its own motion or 
upon application by the user, owner or operator that is the subject 
of such penalty. In any proceeding to review a penalty imposed 
under paragraph (1), the Commission, after notice and opportunity 
for hearing (which hearing may consist solely of the record before 
the ERO and opportunity for the presentation of supporting reasons 
to affirm, modify, or set aside the penalty), shall by order affirm, 
set aside, reinstate, or modify the penalty, and, if appropriate, 
remand to the ERO for further proceedings. The Commission shall 
implement expedited procedures for such hearings. 
‘‘(3) On its own motion or upon complaint, the Commission 
may order compliance with a reliability standard and may impose 
a penalty against a user or owner or operator of the bulk-power 
system if the Commission finds, after notice and opportunity for 
a hearing, that the user or owner or operator of the bulk-power 
system has engaged or is about to engage in any acts or practices 
that constitute or will constitute a violation of a reliability standard. 
‘‘(4) The Commission shall issue regulations authorizing the 
ERO to enter into an agreement to delegate authority to a regional 
entity for the purpose of proposing reliability standards to the 
ERO and enforcing reliability standards under paragraph (1) if— 
‘‘(A) the regional entity is governed by— 
‘‘(i) an independent board; 
‘‘(ii) a balanced stakeholder board; or 
‘‘(iii) a combination independent and balanced stake-
holder board. 
‘‘(B) the regional entity otherwise satisfies the provisions 
of subsection (c)(1) and (2); and 
‘‘(C) the agreement promotes effective and efficient adminis-
tration of bulk-power system reliability. 
The Commission may modify such delegation. The ERO and the 
Commission shall rebuttably presume that a proposal for delegation 
to a regional entity organized on an Interconnection-wide basis 
promotes effective and efficient administration of bulk-power system 
reliability and should be approved. Such regulation may provide 
that the Commission may assign the ERO’s authority to enforce 
reliability standards under paragraph (1) directly to a regional 
entity consistent with the requirements of this paragraph. 
‘‘(5) The Commission may take such action as is necessary 
or appropriate against the ERO or a regional entity to ensure 
compliance with a reliability standard or any Commission order 
affecting the ERO or a regional entity.