Electric Utility Policy: Comparison of House-Passed H.R. 6 and S.Amdt. 1412, 108th Congress
Released: 2003-08-26T00:00:00

Introduction

Historically, electric utilities have been regarded as natural monopolies requiring regulationat the state and federal levels. The Energy Policy Act of 1992 (EPACT, P.L. 102-486 ) removed anumber of regulatory barriers to electricity generation in an effort to increase supply and introducecompetition, and further legislation has been introduced and debated to resolve remaining issuesaffecting transmission, reliability, and other restructuring concerns.

Electric utility provisions are included in comprehensive energy legislation that has passedboth the House and Senate. The House passed H.R. 6 on April 11, 2003. On July 31,2003, the Senate suspended debate on S. 14 , the comprehensive energy bill that hadbeen drafted by the Energy and Natural Resources Committee, and instead passed H.R. 6with the text of the Senate-passed version of H.R. 4 from the 107th Congress. For acomparison of the House- and Senate-passed versions of H.R. 6, see CRS Report RL32033, Omnibus Energy Legislation (H.R. 6): Side-by-Side Comparison of Non-TaxProvisions .

Before debate on S. 14 was suspended, Senator Domenici proposed S.Amdt. 1412 on July 29, 2003, to completely replace the electricity title of S.14 as introduced in the Senate. The proposed amendment was withdrawn on July 31,2003, and is not included in the Senate-passed energy bill. However, majority staff of the SenateEnergy and Natural Resources Committee have indicated that provisions of the amendment mightbe brought up in conference. (1)

Title VI of the House-passed H.R. 6 would, in part, provide for incentive-basedtransmission rates, allow transmission owners in certain instances to exercise the right of eminentdomain to site new transmission lines, create an electric reliability organization, give new, butlimited, authority to the Federal Energy Regulatory Commission (FERC) over municipal andcooperative transmission systems, and clarify the right of transmission owners to serve existingcustomers (native load).

In addition, the House bill would repeal the Public Utility Holding Company Act (PUHCA)and give FERC and state public utility commissions access to books and records, prospectivelyrepeal the mandatory purchase requirement of the Public Utility Regulatory Policies Act of 1978(PURPA), and require utilities to provide real-time rates and time-of-use metering. The Houseversion of H.R. 6 would establish market transparency rules, explicitly prohibitround-trip trading, and increase criminal penalties under the Federal Power Act.

Like the House-passed electricity provisions of H.R. 6 , S.Amdt. 1412 would, in a more limited fashion, give FERC rate authority over municipal and cooperativetransmission systems, create an electric reliability organization, repeal PUHCA and give FERC andstate public utility commissions access to books and records, prospectively repeal the mandatorypurchase requirement of PURPA, clarify the right of transmission owners to serve native load,explicitly prohibit round-trip trading, establish market transparency rules, and increase criminalpenalties under the Federal Power Act.

Unlike the House-passed H.R. 6 , S.Amdt. 1412 does not contain provisions that would allow transmission owners to exercise the right of eminent domain to site newtransmission lines.

S.Amdt. 1412 contains provisions that are not included in the House-passed H.R. 6 . These include provisions that prohibit FERC from requiring utilities to transferoperational control of transmission facilities to a regional transmission organization (RTO), giveauthority to power marketing administrations and the Tennessee Valley Authority to join RTOs,remand FERC's Standard Market Design (SMD) notice of proposed rulemaking, and strengthenFERC's merger review authority.

For additional information, see CRS Report RL32728 , Electric Utility Regulatory Reform:Issues for the 109th Congress .

Definitions

Transmission Capacity

Transmission Operation

Reliability

Public Utility Holding Company Act Amendments

Public Utility Regulatory Policies Act (PURPA) Amendments

Renewable Energy

Market Transparency, Round Trip Trading Prohibition, and Enforcement

Consumer Protections

Merger Review Reform and Accountability

Study of Economic Dispatch