[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2929 Introduced in House (IH)]







104th CONGRESS
  2d Session
                                H. R. 2929

To amend title I of the Public Utility Regulatory Policies Act of 1978 
               to deregulate the electric power industry.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 1, 1996

  Mr. Markey introduced the following bill; which was referred to the 
    Committee on Commerce, and in addition to the Committee on the 
 Judiciary, for a period to be subsequently determined by the Speaker, 
 in each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend title I of the Public Utility Regulatory Policies Act of 1978 
               to deregulate the electric power industry.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Electric Power 
Competition Act of 1996''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Findings.
     TITLE I--SUSPENSION OF PUBLIC UTILITY REGULATORY POLICIES ACT 
                               PROVISIONS

Sec. 101. Purchases from qualifying facilities.
       TITLE II--STANDARDS OF COMPETITION FOR ELECTRIC UTILITIES

Sec. 201. Standards of competition.
                       TITLE III--ANTITRUST LAWS

Sec. 301. State action doctrine.

SEC. 2. FINDINGS.

    The Congress finds that equitable rates for electric consumers and 
increased efficiency in the use of technology and resources for the 
generation of electric power require--
            (1) reliance on competition and market forces rather than 
        regulation of monopolies to generate the most efficient and 
        reliable electricity for ratepayers;
            (2) access to transmission and distribution facilities for 
        all suppliers and marketers of electricity with pricing and 
        terms and conditions on a comparable basis with those who own 
        or control such facilities;
            (3) a program to promote fuel diversity and conservation 
        and environmental protection through the encouragement of 
        renewable technologies and other environmentally benign 
        generation resources;
            (4) the ability of electric utilities to recover legitimate 
        and verifiable stranded costs;
            (5) the preservation of the benefits and exemptions 
        necessary for a competitive market, including mandatory power 
        purchase provisions which are provided to qualifying small 
        power production facilities and qualifying cogeneration 
        facilities under section 210 of the Public Utility Regulatory 
        Policies Act of 1978 until and unless standards of competition 
        are adopted by the Federal Energy Regulatory Commission and 
        implemented by the State regulatory authorities removing 
        structural or other barriers to competition in electricity 
        markets; and
            (6) reform of Federal and State electric utility regulatory 
        laws and regulations, including eliminating certain exemptions 
        from certain antitrust laws, which create unnecessary obstacles 
        to competition and to prevention of anticompetitive behavior of 
        entities with market power.

     TITLE I--SUSPENSION OF PUBLIC UTILITY REGULATORY POLICIES ACT 
                               PROVISIONS

SEC. 101. PURCHASES FROM QUALIFYING FACILITIES.

    Title II of the Public Utility Regulatory Policies Act of 1978 is 
amended by adding the following new sections at the end thereof:

``SEC. 214. UTILITIES WITH CERTIFICATION OF COMPETITION.

    ``(a) Certain Requirements of Section 210 Suspended.--If an 
electric utility has received a Certification of Competition from a 
State regulatory authority in accordance with subtitle F of title I--
            ``(1) the provisions of section 210 requiring electric 
        utilities to offer to purchase electric energy from qualifying 
        cogeneration facilities and qualifying small power production 
        facilities shall be suspended; and
            ``(2) for power purchase arrangements entered into during 
        the period of any such suspension, for the duration of such 
        power purchase arrangements the rates for such purchase shall 
        not be dependent on the incremental cost to the electric 
        utility of alternative energy in section 210(b).
    ``(b) Protection of Existing Contractual Commitments.--Nothing in 
this Act, directly or indirectly, authorizes the Commission, a State 
regulatory authority, or any electric utility to reopen, alter, 
curtail, force the renegotiation of, or interfere with the enforcement 
of any power purchase arrangements between a qualifying cogeneration 
facility or qualifying small power production facilities and an 
electric utility purchaser.
    ``(c) Terms.--For purposes of this section the terms `qualifying 
cogeneration facility' and `qualifying small power production facility' 
shall have the meaning provided for such terms by section 3(18) of the 
Federal Power Act.

``SEC. 215. ENCOURAGEMENT OF PARTICULAR GENERATION TECHNOLOGIES.

    ``Nothing in this Act, the Federal Power Act, or any other 
provision of Federal law prevents a State regulatory authority from 
favoring or disfavoring particular types of generation in its 
determination for purposes of section 210 of the incremental cost to a 
purchasing electric utility of alternative electric energy. Where a 
State regulatory authority determines that an electric utility's 
incremental cost of alternative electric energy shall be determined by 
competitive bidding, the State regulatory authority may segment the bid 
by generation technology or by groups of generation technologies.''.

       TITLE II--STANDARDS OF COMPETITION FOR ELECTRIC UTILITIES

SEC. 201. STANDARDS OF COMPETITION.

    Title I of the Public Utility Regulatory Policies Act of 1978 is 
amended by adding the following new subtitle at the end thereof:

     ``Subtitle F--Standards of Competition for Electric Utilities

``SEC. 151. CERTIFICATION OF COMPETITION BY STATE REGULATORY 
              AUTHORITIES.

    ``(a) Voluntary State Certification.--A State regulatory authority 
may elect to issue a State certification of compliance with standards 
and requirements of competition under this subtitle to a State 
regulated electric utility for which it has ratemaking authority. Such 
election shall be voluntary. Nothing in this subtitle prohibits any 
State regulatory authority from determining that it is not appropriate 
to issue or deny any such certification in the case of any electric 
utility for which the State regulatory authority has ratemaking 
authority. Nothing in this subtitle prohibits or limits any State 
regulatory authority from implementing any other process regarding 
competition for electric utilities subject to the jurisdiction of such 
State regulatory authority.
    ``(b) Criteria for Certification.--After notice and opportunity for 
hearing, the Commission shall establish, by rule, in accordance with 
standards of competition set forth in section 152 criteria for the 
certification by a State regulatory authority that a State regulated 
electric utility for which it has ratemaking authority has met--
            ``(1) the minimum certification requirements of section 
        153,
            ``(2) either--
                    ``(A) the Federal retail competition standard set 
                forth in section 152(a), or
                    ``(B) the Federal divestiture standard competition 
                set forth in section 152(b); and
            ``(3) such other requirements as the Commission shall 
        prescribe consistent with the public interest and the purposes 
        of this title.

``SEC. 152. FEDERAL STANDARDS OF COMPETITION.

    ``(a) Retail Competition Standard.--(1) A State regulated electric 
utility meets the retail competition standard if the State regulatory 
authority which has ratemaking authority over such utility determines, 
in accordance with criteria established by the Commission under section 
151(b), and after notice and opportunity for hearing, that--
            ``(A) the utility permits competition in retail sales of 
        electric energy to all consumers within its service territory;
            ``(B) the opportunity to build, own, and operate all new 
        generating capacity approved by a State regulatory authority is 
        open to competition by all sources, and
            ``(C) the electric utility does not gain any advantage over 
        other competitors by virtue of its status as a regulated buyer 
        and seller of electricity in its service territory.
    ``(2) Certification under paragraph (1) of this subsection shall be 
withdrawn if the State regulatory authority finds that--
            ``(A) an electric utility affiliate is competing unfairly 
        by using assets, goods, or services obtained from the electric 
        utility at a price below the market value; or
            ``(B) the electric utility or its affiliate has 
        discriminatory access to any asset, service, or information 
        which would be helpful to a competitor where the access is 
        attributable to the electric utility's status as a regulated 
        integrated monopoly or the asset or information is an essential 
        facility that is not economically duplicable by a competitor.
    ``(b) Divestiture Standard.--A State regulated electric utility 
that is an integrated electric utility that owns or controls a monopoly 
distribution franchise, monopoly transmission facilities, or both, 
meets the divestiture standard of competition if the State regulatory 
authority which has ratemaking authority over such utility determines, 
in accordance with criteria established by the Commission under section 
151(b), and after notice and opportunity for hearing, that the utility 
has--
            ``(1) divested itself of all existing generation facilities 
        and is prohibited under State law from directly or indirectly 
        acquiring ownership or control of any generation facilities for 
        so long as it owns or controls a monopoly distribution 
        franchise or transmission facilities, and
            ``(2) in the case of a utility that owns or controls 
        transmission facilities, adopted open access transmission 
        tariffs that have been approved as just, reasonable, and not 
        unduly preferential.

``SEC. 153. MINIMUM CERTIFICATION REQUIREMENTS.

    ``A State regulatory authority may not issue a certification of 
competition under this subtitle to any electric utility unless the 
authority has made each of the following determinations:
            ``(1) A determination that all suppliers of energy services 
        to the utility or to electricity consumers in the service 
        territory of the utility have both the incentive and 
        opportunity to provide energy-efficiency and renewable energy 
        resources that are less costly on a life-cycle basis than 
        displaced generation.
            ``(2) A determination that nonbypassable charges on use of, 
        or access to, the local distribution services or facilities of 
        the utility are in effect and adequate to ensure sustained and 
        equitable allocation of costs associated with low-income 
        services and other investments, including those in fuel 
        diversity and energy efficiency, that deliver system wide 
        benefits in the form of equity among, or reduced life-cycle 
        costs of service to, electricity consumers in the service 
        territory of the utility: Provided, That the fuel diversity 
        objective may also be met by minimum portfolio standards that 
        ensure maintenance or improvement of current levels of reliance 
        on renewable energy resources.
            ``(3) A determination that any systems of retail 
        competition among electric-service suppliers are structured to 
        protect customers from price discrimination or undue price 
        increases and to ensure that no customer class can avoid its 
        equitable share of the electric utility's legitimate and 
        verifiable stranded costs.
            ``(4) A determination that under applicable State laws and 
        regulations, any recovery of sunk costs associated with 
        existing generation assets, is not contingent on continued 
        operation of the generation assets for which recovery is 
        approved.''.

                       TITLE III--ANTITRUST LAWS

SEC. 301. STATE ACTION DOCTRINE.

    (a) General Rule.--In order to ensure that remedies for 
anticompetitive abuses are available to entities competing in the 
electric generation market, utilities exercising monopoly functions 
under State regualtion may not use the ``State action'' doctrine of 
antitrust jurisprudence as a defense against charges of anticompetitive 
behavior in unregulated generation markets.
    (b) Terms.--For purposes of this section--
            (1) The terms used in this title shall have the same 
        meaning as when used in title I of the Public Utility 
        Regulatory Policies Act of 1978.
            (2) The term ``antitrust laws'' includes the Sherman 
        Antitrust Act (15 U.S.C. 1 et seq.) and amendments thereto, the 
        Clayton Act (15 U.S.C. 12 et seq.) and amendments thereto, 
        regulations promulgated under such laws, and Federal court 
        decisions interpreting such laws.
            (3) The term ``State action doctrine'' means the judicial 
        rule first articulated by the United States Supreme Court in 
        Parker v. Brown, 317 U.S. 341, 352 (1943) by which any act 
        would be exempt from compliance with Federal antitrust laws 
        because taken pursuant to direction or authorization by the 
        laws, regulations, or governmental activity of any State.
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