A bill to amend the Tennessee Valley Authority Act of 1933 to provide for greater ownership of electric power generation assets by municipal and rural electric cooperative utilities that provide retail electric service in the Tennessee Valley region, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``TVA Distributor Self-Sufficiency Act 
of 2001''.

SEC. 2. LIMITATION ON AUTHORITY OF TENNESSEE VALLEY AUTHORITY.

    Section 4 of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 
831c) is amended by adding at the end the following:
    ``(m)(1) Shall not prohibit, interfere with, or impair any 
determination made or any activity conducted by a TVA distributor 
(acting alone or in combination with any person) to build, acquire any 
interest in, operate any part of, or purchase electric power from a 
facility for the generation of electric power for the purpose of 
supplying the incremental power supply needs of the TVA distributor 
(without regard to any other purpose for which electric power supplied 
by the facility is used).
    ``(2) In this subsection--
            ``(A) the term `incremental power supply needs' means the 
        power generation capacity that a TVA distributor determines is 
        required to satisfy the projected peak load of the TVA 
        distributor (with appropriate reserve margins), to the extent 
        that the projected peak load and margins exceed the average 
        annual quantity of power purchases of the TVA distributor 
        during 1996, 1997, and 1998; and
            ``(B) the term `TVA distributor' means a cooperative 
        organization or publicly owned electric power system that, on 
        January 2, 2001, purchased electric power at wholesale from the 
        Corporation.''.

SEC. 3. TENNESSEE VALLEY AUTHORITY LEAST COST PLANNING PROGRAM.

    Section 113 of the Energy Policy Act of 1992 (16 U.S.C. 831m-1) is 
amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Definitions.--In this section:
            ``(1) TVA distributor.--The term `TVA distributor' means a 
        cooperative organization or publicly owned electric power 
        system that, on January 2, 2001, purchased electric power at 
        wholesale from the Tennessee Valley Authority.
            ``(2) System cost.--
                    ``(A) In general.--The term `system cost' means all 
                direct and quantifiable net costs of an energy resource 
                over the available life of the energy resource.
                    ``(B) Inclusions.--The term `system cost' includes 
                the costs of--
                            ``(i) production;
                            ``(ii) transportation;
                            ``(iii) utilization;
                            ``(iv) waste management;
                            ``(v) environmental compliance; and
                            ``(vi) in the case of an imported energy 
                        resource, maintaining access to a foreign 
                        source of supply.'';
            (2) in subsection (b)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) In general.--
                    ``(A) Triennial planning programs.--The Tennessee 
                Valley Authority shall conduct a least-cost planning 
                program in accordance with this section once every 3 
                years, including 1 such program to be concluded by 
                December 31, 2001.
                    ``(B) Public participation.--Each planning program 
                shall be open to public participation.
                    ``(C) Requirements.--In conducting a planning 
                program, the Tennessee Valley Authority shall use a 
                planning and selection process for new energy resources 
                that evaluates the full range of existing and 
                incremental resources (including new power supplies 
                that may be constructed, owned, and operated by 1 or 
                more TVA distributors, other new power supplies, energy 
                conservation and efficiency, and renewable energy 
                resources) in order to provide adequate and reliable 
                service to electric customers of the Tennessee Valley 
                Authority requiring such service at the lowest system 
                cost.'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (B), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (C), by striking the 
                        period at the end and inserting 
                        ``; and''; and
                            (iii) by adding at the end the following:
                    ``(D) take into account current, planned, and 
                projected ownership and self-supply of power generation 
                resources by 1 or more TVA distributors.''; and
                    (C) by striking paragraph (3); and
            (3) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by striking 
                        ``distributors of the Tennessee Valley 
                        Authority'' and inserting ``TVA distributors''; 
                        and
                            (ii) by striking subparagraph (B) and 
                        inserting the following:
                    ``(B) encourage and assist TVA distributors in--
                            ``(i) the planning and implementation of 
                        cost-effective energy efficiency options;
                            ``(ii) load forecasting; and
                            ``(iii) the planning, construction, 
                        ownership, operation, and maintenance of power 
                        generation facilities owned or acquired by a 
                        TVA distributor.''; and
                    (B) in the first and second sentences of paragraph 
                (2), by striking ``distributors'' and inserting ``TVA 
                distributors''.

SEC. 4. INCLUSION OF THE TENNESSEE VALLEY AUTHORITY IN THE DEFINITION 
              OF PUBLIC UTILITY FOR PURPOSES OF PARTS II AND III OF THE 
              FEDERAL POWER ACT.

    (a) In General.--Section 201(e) of the Federal Power Act (16 U.S.C. 
824(e)) is amended--
            (1) by striking ``means any person who'' and inserting 
        ``means--
            ``(1) any person that'';
            (2) by striking ``the period at the end and inserting ``; 
        and''; and
            (3) by adding at the end the following:
            ``(2) the Tennessee Valley Authority.''.
    (b) Conforming Amendment.--Section 201(f) of the Federal Power Act 
(16 U.S.C. 824(f)) is amended by striking ``foregoing, or any 
corporation'' and inserting ``foregoing (other than the Tennessee 
Valley Authority), or any corporation''.

Summary: TVA Distributor Self-Sufficiency Act of 2001 - Amends the Tennessee Valley Authority Act of 1933 to prohibit the Tennessee Valley Authority (TVA) from prohibiting, interfering with, or impairing any determination made or any activity conducted by a TVA distributor to build, acquire any interest in, operate, or purchase electric power from an electric power generating facility for the purpose of supplying the distributor's incremental power supply needs.Amends the Energy Policy Act of 1992 to require TVA to conduct a triennial least-cost planning program open to public participation.Amends the Federal Power Act to include TVA in the definition of public utility for purposes of such Act.