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SEC. 205. OPEN ACCESS TRANSMISSION BY CERTAIN UTILI-
TIES.
Part II of the Federal Power Act is further amended
by inserting after section 211 the following:
‘‘OPEN ACCESS BY UNREGULATED TRANSMITTING
UTILITIES
‘‘SEC. 211A. (a) Subject to section 212(h), the Commis-
sion may, by rule or order, require an unregulated trans-
mitting utility to provide transmission services—
‘‘(1) at rates that are comparable to those that
the unregulated transmitting utility charges itself,
and
‘‘(2) on terms and conditions (not relating to
rates) that are comparable to those under Commission
rules that require public utilities to offer open access
transmission services and that are not unduly dis-
criminatory or preferential.
‘‘(b) The Commission shall exempt from any rule or
order under this subsection any unregulated transmitting
utility that—
‘‘(1) sells no more than 4,000,000 megawatt
hours of electricity per year;
‘‘(2) does not own or operate any transmission
facilities that are necessary for operating an inter-
connected transmission system (or any portion there-
of); or
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‘‘(3) meets other criteria the Commission deter-
mines to be in the public interest.
‘‘(c) The rate changing procedures applicable to public
utilities under subsections (c) and (d) of section 205 are
applicable to unregulated transmitting utilities for pur-
poses of this section.
‘‘(d) In exercising its authority under paragraph (1),
the Commission may remand transmission rates to an un-
regulated transmitting utility for review and revision where
necessary to meet the requirements of subsection (a).
‘‘(e) The provision of transmission services under sub-
section (a) does not preclude a request for transmission
services under section 211.
‘‘(f) The Commission may not require a State or mu-
nicipality to take action under this section that constitutes
a private business use for purposes of section 141 of the
Internal Revenue Code of 1986 (26 U.S.C. 141).
‘‘(g) For purposes of this subsection, the term ‘unregu-
lated transmitting utility’ means an entity that—
‘‘(1) owns or operates facilities used for the
transmission of electric energy in interstate com-
merce, and
‘‘(2) is either an entity described in section
201(f) or a rural electric cooperative.’’.
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SEC. 206. ELECTRIC RELIABILITY STANDARDS.
Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by inserting the following after section 215
as added by this Act:
‘‘SEC. 216. ELECTRIC RELIABILITY.
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) ‘bulk-power system’ means the network of
interconnected transmission facilities and generating
facilities;
‘‘(2) ‘electric reliability organization’ means a
self-regulating organization certified by the Commis-
sion under subsection (c) whose purpose is to promote
the reliability of the bulk-power system; and
‘‘(3) ‘reliability standard’ means a requirement
to provide for reliable operation of the bulk-power sys-
tem approved by the Commission under this section.
‘‘(b) JURISIDICTION AND APPLICABILITY.—The Com-
mission shall have jurisdiction, within the United States,
over an electric reliability organization, any regional enti-
ties, 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 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.
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‘‘(c) CERTIFICATION.—(1) 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.
‘‘(2) Following the issuance of a Commission rule
under paragraph (1), any person may submit an applica-
tion to the Commission for certification as an electric reli-
ability organization. The Commission may certify an ap-
plicant if the Commission determines that the applicant—
‘‘(A) has the ability to develop, and enforce reli-
ability standards that provide for an adequate level
of reliability of the bulk-power system;
‘‘(B) has established rules that—
‘‘(i) 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 directors and balanced deci-
sionmaking in any committee or subordinate or-
ganizational structure;
‘‘(ii) allocate equitably dues, fees, and other
charges among end users for all activities under
this section;
‘‘(iii) provide fair and impartial procedures
for enforcement of reliability standards through
imposition of penalties (including limitations on
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activities, functions, or operations, or other ap-
propriate sanctions); and
‘‘(iv) provide for reasonable notice and op-
portunity for public comment, due process, open-
ness, and balance of interests in developing reli-
ability standards and otherwise exercising its
duties.
‘‘(3) If the Commission receives two or more timely
applications that satisfy the requirements of this subsection,
the Commission shall approve only the application it con-
cludes will best implement the provisions of this section.
‘‘(d) RELIABILITY STANDARDS.—(1) An electric reli-
ability organization shall file a proposed reliability stand-
ard or modification to a reliability standard with the Com-
mission.
‘‘(2) The Commission may approve a proposed reli-
ability 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 tech-
nical expertise of the electric reliability organization with
respect to the content of a proposed standard or modifica-
tion to a reliability standard, but shall not defer with re-
spect to its effect on competition.
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‘‘(3) The electric reliability organization and the Com-
mission shall rebuttably presume that a proposal from a
regional entity organized on an interconnection-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 reli-
ability organization for further consideration a proposed re-
liability standard or a modification to a reliability stand-
ard that the Commission disapproves in whole or in part.
‘‘(5) The Commission, upon its own motion or upon
complaint, may order an electric reliability organization
to submit to the Commission a proposed reliability stand-
ard or a modification to a reliability standard that address-
es a specific matter if the Commission considers such a new
or modified reliability standard appropriate to carry out
this section.
‘‘(e) ENFORCEMENT.—(1) An electric reliability orga-
nization may impose a penalty on a user or owner or oper-
ator of the bulk-power system if the electric reliability orga-
nization, after notice and an opportunity for a hearing—
‘‘(A) finds that the user or owner or operator of
the bulk-power system has violated a reliability
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standard approved by the Commission under sub-
section (d); and
‘‘(B) files notice with the Commission, which
shall affirm, set aside or modify the action.
‘‘(2) On its own motion or upon complaint, the Com-
mission may order compliance with a reliability standard
and may impose a penalty against a user or owner or oper-
ator 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 violated or threat-
ens to violate a reliability standard.
‘‘(3) The Commission shall establish regulations au-
thorizing the electric reliability organization to enter into
an agreement to delegate authority to a regional entity for
the purpose of proposing and enforcing reliability stand-
ards (including related activities) if the regional entity sat-
isfies the provisions of subsection (c)(2) (A) and (B) and
the agreement promotes effective and efficient administra-
tion of bulk-power system reliability, and may modify such
delegation. The electric reliability organization and the
Commission shall rebuttably presume that a proposal for
delegation to a regional entity organized on an interconnec-
tion-wide basis promotes effective and efficient administra-
tion of bulk-power system reliability and should be ap-
proved. Such regulation may provide that the Commission
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may assign the electric reliability organization’s authority
to enforce reliability standards directly to a regional entity
consistent with the requirements of this paragraph.
‘‘(4) The Commission may take such action as is nec-
essary or appropriate against the electric reliability organi-
zation or a regional entity to ensure compliance with a reli-
ability standard or any Commission order affecting the
electric reliability organization or a regional entity.
‘‘(f) CHANGES IN ELECTRICITY RELIALB1LITY ORGANI-
ZATION RULES.—An electric reliability organization shall
file with the Commission for approval any proposed rule
or proposed rule change, accompanied by an explanation
of its basis and purpose. The Commission, upon its own
motion or complaint, may propose a change to the rules
of the electric reliability organization. A proposed rule or
proposed rule change shall take effect upon a finding by
the Commission, after notice and opportunity for comment,
that the change is just, reasonable, not unduly discrimina-
tory or preferential, is in the public interest, and satisfies
the requirements of subsection (c)(2).
‘‘(g) COORDINATION WITH CANADA AND MEXICO.—(1)
The electric reliability organization shall take all appro-
priate steps to gain recognition in Canada and Mexico.
‘‘(2) The President shall use his best efforts to enter
into international agreements with the governments of Can-
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ada and Mexico to provide for effective compliance with re-
liability standards and the effectiveness of the electric reli-
ability organization in the United States and Canada or
Mexico.
‘‘(h) RELIABILITY REPORTS.—The electric reliability
organization shall conduct periodic assessments of the reli-
ability and adequacy of the interconnected bulk-power sys-
tem in North America.
‘‘(i) SAVINGS PROVISIONS.—(1) The electric reliability
organization shall have authority to develop and enforce
compliance with standards for the reliable operation of only
the bulk-power system.
‘‘(2) This section does not provide the electric reli-
ability organization or the Commission with the authority
to order the construction of additional generation or trans-
mission capacity or to set and enforce compliance with
standards for adequacy or safety of electric facilities or serv-
ices.
‘‘(3) Nothing in this section shall be construed to pre-
empt any authority of any State to take action to ensure
the safety, adequacy, and reliability of electric service with-
in that State, as long as such action is not inconsistent
with any reliability standard.
‘‘(4) Within 90 days of the application of the electric
reliability organization or other affected party, and after
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notice and opportunity for comment, the Commission shall
issue a final order determining whether a State action is
inconsistent with a reliability standard, taking into consid-
eration any recommendation of the electric reliability orga-
nization.
‘‘(5) The Commission, after consultation with the elec-
tric reliability organization, may stay the effectiveness of
any State action, pending the Commission’s issuance of a
final order.
‘‘(j) APPLICATION OF ANTITRUST LAWS.—
‘‘(1) IN GENERAL.—To the extent undertaken to
develop, implement, or enforce a reliability standard,
each of the following activities shall not, in any ac-
tion under the antitrust laws, be deemed illegal per
se—
‘‘(A) activities undertaken by an electric re-
liability organization under this section, and
‘‘(B) activities of a user or owner or oper-
ator of the bulk-power system undertaken in good
faith under the rules of an electric reliability or-
ganization.
‘‘(2) RULE OF REASON.—In any action under
the antitrust laws, an activity described in paragraph
(1) shall be judged on the basis of its reasonableness,
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taking into account all relevant factors affecting com-
petition and reliability.
‘‘(3) DEFINITION.—For purposes of this sub-
section, ‘antitrust laws’ has the meaning given the
term in subsection (a) of the first section of the Clay-
ton Act (15 U.S.C. 12(a)), except that it includes sec-
tion 5 of the Federal Trade Commission Act (15 U.
S.C. 45) to the extent that section 5 applies to unfair
methods of competition.
‘‘(k) REGIONAL ADVISORY BODIES.—The Commission
shall establish a regional advisory body on the petition of
at least two-thirds of the States within a region that have
more than one-half of their electric load served within the
region. A regional advisory body shall be composed of one
member from each participating State in the region, ap-
pointed by the Governor of each State, and may include
representatives of agencies, States, and provinces outside the
United States. A regional advisory body may provide ad-
vice to the electric reliability organization, a regional reli-
ability entity, or the Commission regarding the governance
of an existing or proposed regional reliability entity within
the same region, whether a standard proposed to apply
within the region is just, reasonable, not unduly discrimi-
natory or preferential, and in the public interest, whether
fees proposed to be assessed within the region are just, rea-
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sonable, not unduly discriminatory or preferential, and in
the public interest and any other responsibilities requested
by the Commission. The Commission may give deference to
the advice of any such regional advisory body if that body
is organized on an interconnection-wide basis.
‘‘(l) APPLICATION TO ALASKA AND HAWAII.—The pro-
visions of this section do not apply to Alaska or Hawaii.’’.
SEC. 207. MARKET TRANSPARENCY RULES.
Part II of the Federal Power Act is further amended
by adding at the end the following:
‘‘SEC. 216. MARKET TRANSPARENCY RULES.
‘‘(a) COMMISSION RULES.—Not later than 180 days
after the date of enactment of this section, the Commission
shall issue rules establishing an electronic information sys-
tem to provide information about the availability and price
of wholesale electric energy and transmission services to the
Commission, State commissions, buyers and sellers of
wholesale electric energy, users of transmission services, and
the public on a timely basis.
‘‘(b) INFORMATION
REQUIRED.—The Commission
shall require—
‘‘(1) each regional transmission organization to
provide statistical information about the available ca-
pacity and capacity constraints of transmission fa-
cilities operated by the organization; and
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‘‘(2) each broker, exchange, or other market-mak-
ing entity that matches offers to sell and offers to buy
wholesale electric energy in interstate commerce to
provide statistical information about the amount and
sale price of sales of electric energy at wholesale in
interstate commerce it transacts.
‘‘(c) TIMELY BASIS.—The Commission shall require
the information required under subsection (b) to be posted
on the Internet as soon as practicable and updated as fre-
quently as practicable.
‘‘(d) PROTECTION OF SENSITIVE INFORMATION.—The
Commission shall exempt from disclosure commercial or fi-
nancial information that the Commission, by rule or order,
determines to be privileged, confidential, or otherwise sen-
sitive.’’.
SEC. 208. ACCESS TO TRANSMISSION BY INTERMITTENT
GENERATORS.
Part II of the Federal Power Act is further amended
by adding at the end the following:
‘‘SEC. 217. ACCESS TO TRANSMISSION BY INTERMITTENT
GENERATORS.
‘‘(a) FAIR TREATMENT OF INTERMITTENT GENERA-
TORS.—The Commission shall ensure that all transmitting
utilities provide transmission service to intermittent gen-
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erators in a manner that does not unduly prejudice or dis-
advantage such generators for characteristics that are—
‘‘(1) inherent to intermittent energy resources;
and
‘‘(2) are beyond the control of such generators.
‘‘(b) POLICIES.—The Commission shall ensure that the
requirement in subsection (a) is met by adopting such poli-
cies as it deems appropriate which shall include the fol-
lowing:
‘‘(1) Subject to the sole exception set forth in
paragraph (2), the Commission shall ensure that the
rates transmitting utilities charge intermittent gener-
ator customers for transmission services do not un-
duly prejudice or disadvantage intermittent generator
customers for scheduling deviations.
‘‘(2) The Commission may exempt a transmit-
ting utility from the requirement set forth in para-
graph (1) if the transmitting utility demonstrates
that scheduling deviations by its intermittent gener-
ator customers are likely to have an adverse impact
on the reliability of the transmitting utility’s system.
‘‘(3) The Commission shall ensure that to the ex-
tent any transmission charges recovering the trans-
mitting utility’s embedded costs are assessed to such
intermittent generators, they are assessed to such gen-
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erators on the basis of kilowatt-hours generated or
some other method to ensure that they are fully recov-
ered by the transmitting utility.
‘‘(4) The Commission shall require transmitting
utilities to offer to intermittent generators, and may
require transmitting utilities to offer to all trans-
mission customers, access to nonfirm transmission
service.
‘‘(c) DEFINITIONS.—As used in this section:
‘‘(1) The term ‘intermittent generator’ means a
facility that generates electricity using wind or solar
energy and no other energy source.
‘‘(2) The term ‘nonfirm transmission service’
means transmission service provided on an ‘as avail-
able’ basis.
‘‘(3) The term ‘scheduling deviation’ means de-
livery of more or less energy than has previously been
forecast in a schedule submitted by an intermittent
generator to a control area operator or transmitting
utility.’’.
SEC. 209. ENFORCEMENT.
(a) COMPLAINTS.—Section 306 of the Federal Power
Act (16 U.S.C. 825e) is amended by—
(1) inserting ‘‘electric utility,’’ after ‘‘Any per-
son,’’; and
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(2) inserting ‘‘transmitting utility,’’ after ‘‘li-
censee’’ each place it appears.
(b) INVESTIGATIONS.—Section 307(a) of the Federal
Power Act (16 U.S.C. 825f(a)) is amended by inserting ‘‘or
transmitting utility’’ after ‘‘any person’’ in the first sen-
tence.
(c) REVIEW OF COMMISSION ORDERS.—Section 313(a)
of the Federal Power Act (16 U.S.C. 8251) is amended by
inserting ‘‘electric utility,’’ after ‘‘Any person,’’ in the first
sentence.
(d) CRIMINAL PENALTIES.—Section 316(c) of the Fed-
eral Power Act (16 U.S.C. 825o(c)) is repealed.
(e) CIVIL PENALTIES.—Section 316A of the Federal
Power Act (16 U.S.C. 825o–1) is amended by striking ‘‘sec-
tion 211, 212, 213, or 214’’ each place it appears and in-
serting ‘‘Part II’’.
SEC. 210. ELECTRIC POWER TRANSMISSION SYSTEMS.
The Federal Government should be attentive to electric
power transmission issues, including issues that can be ad-
dressed through policies that facilitate investment in, the
enhancement of, and the efficiency of electric power trans-
mission systems.
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Subtitle 
B—Amendments 
to 
the
Public Utility Holding Company
Act
SEC. 221. SHORT TITLE.
This subtitle may be cited as the ‘‘Public Utility Hold-
ing Company Act of 2003’’.
SEC. 222. DEFINITIONS.
For purposes of this subtitle:
(1) The term ‘‘affiliate’’ of a company means
any company, 5 percent or more of the outstanding
voting securities of which are owned, controlled, or
held with power to vote, directly or indirectly, by
such company.
(2) The term ‘‘associate company’’ of a company
means any company in the same holding company
system with such company.
(3) The term ‘‘Commission’’ means the Federal
Energy Regulatory Commission.
(4) The term ‘‘company’’ means a corporation,
partnership, association, joint stock company, busi-
ness trust, or any organized group of persons, whether
incorporated or not, or a receiver, trustee, or other
liquidating agent of any of the foregoing.
(5) The term ‘‘electric utility company’’ means
any company that owns or operates facilities used for
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the generation, transmission, or distribution of elec-
tric energy for sale.
(6) The terms ‘‘exempt wholesale generator’’ and
‘‘foreign utility company’’ have the same meanings as
in sections 32 and 33, respectively, of the Public Util-
ity Holding Company Act of 1935 (15 U.S.C. 79z–5a,
79z–5b), as those sections existed on the day before the
effective date of this subtitle.
(7) The term ‘‘gas utility company’’ means any
company that owns or operates facilities used for dis-
tribution at retail (other than the distribution only in
enclosed portable containers or distribution to tenants
or employees of the company operating such facilities
for their own use and not for resale) of natural or
manufactured gas for heat, light, or power.
(8) The term ‘‘holding company’’ means—
(A) any company that directly or indirectly
owns, controls, or holds, with power to vote, 10
percent or more of the outstanding voting securi-
ties of a public utility company or of a holding
company of any public utility company; and
(B) any person, determined by the Commis-
sion, after notice and opportunity for hearing, to
exercise directly or indirectly (either alone or
pursuant to an arrangement or understanding
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with one or more persons) such a controlling in-
fluence over the management or policies of any
public utility company or holding company as to
make it necessary or appropriate for the rate
protection of utility customers with respect to
rates that such person be subject to the obliga-
tions, duties, and liabilities imposed by this sub-
title upon holding companies.
(9) The term ‘‘holding company system’’ means
a holding company, together with its subsidiary com-
panies.
(10) The term ‘‘jurisdictional rates’’ means rates
established by the Commission for the transmission of
electric energy in interstate commerce, the sale of elec-
tric energy at wholesale in interstate commerce, the
transportation of natural gas in interstate commerce,
and the sale in interstate commerce of natural gas for
resale for ultimate public consumption for domestic,
commercial, industrial, or any other use.
(11) The term ‘‘natural gas company’’ means a
person engaged in the transportation of natural gas
in interstate commerce or the sale of such gas in
interstate commerce for resale.
(12) The term ‘‘person’’ means an individual or
company.
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(13) The term ‘‘public utility’’ means any person
who owns or operates facilities used for transmission
of electric energy in interstate commerce or sales of
electric energy at wholesale in interstate commerce.
(14) The term ‘‘public utility company’’ means
an electric utility company or a gas utility company.
(15) 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 laws
of such State, has jurisdiction to regulate public util-
ity companies.
(16) 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 di-
rectly 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 oppor-
tunity for hearing, determines to be subject to a
controlling influence, directly or indirectly, by
such holding company (either alone or pursuant
to an arrangement or understanding with one or