[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3790 Introduced in House (IH)]







104th CONGRESS
  2d Session
                                H. R. 3790

 To give all American electricity consumers the right to choose among 
    competitive providers of electricity, in order to secure lower 
 electricity rates, higher quality services, and a more robust United 
                States economy, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 11, 1996

 Mr. Schaefer introduced the following bill; which was referred to the 
                         Committee on Commerce

_______________________________________________________________________

                                 A BILL


 
 To give all American electricity consumers the right to choose among 
    competitive providers of electricity, in order to secure lower 
 electricity rates, higher quality services, and a more robust United 
                States economy, and for other purposes.

    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 
Consumers' Power to Choose Act of 1996''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Findings and purpose.
Sec. 3. Severability.
          TITLE I--COMPETITIVE RETAIL ELECTRIC ENERGY SERVICE

Sec. 101. Definitions.
Sec. 102. Customer choice.
Sec. 103. Retail competition for State regulated electric utilities.
Sec. 104. Retail competition for nonregulated electric utilities.
Sec. 105. Jurisdiction of State courts.
Sec. 106. FERC authority for certain utilities.
Sec. 107. Antitrust laws.
Sec. 108. FERC authority for transmission.
Sec. 109. Effect on other authorities.
Sec. 110. Barriers to entry.
Sec. 111. Illegal changes in customer selections.
Sec. 112. Renewable energy.
Sec. 113. Jurisdictional determinations of transmission and local 
                            distribution facilities.
          TITLE II--PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

Sec. 201. Application of the Public Utility Holding Company Act of 
                            1935.
Sec. 202. Definitions.
Sec. 203. Application of title.
Sec. 204. Exemptions.
Sec. 205. Federal access to books and records.
Sec. 206. State access to books and records.
Sec. 207. Affiliate transactions.
Sec. 208. Effect on other regulation.
Sec. 209. Enforcement.
Sec. 210. Saving provision.
Sec. 211. Implementation.
Sec. 212. Transfers.
Sec. 213. Conforming change.
       TITLE III--PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978

Sec. 301. Application of PURPA provisions.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that:
            (1) Low cost and reliable electricity is integral to the 
        vitality of the United States economy, the competitiveness of 
        domestically made goods and the quality of life of all 
        Americans.
            (2) Americans consume electricity worth more than $200 
        billion a year, approximately half of which is for residential 
        purposes, making the monthly electric utility bill one of the 
        largest expenses for most households.
            (3) The cost of electricity has a direct effect on the 
        price, profitability, and competitiveness of goods and services 
        produced in the United States.
            (4) Lower priced electricity can be realized by giving all 
        American consumers the right to choose among suppliers of 
        electricity in a competitive market, while maintaining, if not 
        improving, the reliability of service those consumers have come 
        to expect.
            (5) The development of vibrant competition in the retail 
        market for electric energy will--
                    (A) reduce the costs of electric energy to even the 
                smallest consumers of electricity;
                    (B) create jobs as American businesses are able to 
                lower costs and better compete in world markets and 
                against foreign competition here at home; and
                    (C) result in a more efficient utility industry.
            (6) Monopoly rate-of-return regulation of electricity has 
        failed. It has stifled competition, resulting in high 
        electricity rates for many consumers and few incentives for 
        technological innovation and good customer service by electric 
        utilities.
            (7) High electricity rates are regressive, placing a 
        disproportionate burden on poor ratepayers.
            (8) High electricity rates divert consumer dollars that 
        would otherwise be spent for purchasing necessary goods and 
        services, savings, or investments that benefit the economy as a 
        whole.
            (9) Congress has authority to enact laws, under the 
        Commerce Clause of the United States Constitution, regarding 
        the generation, transmission, distribution, and sale of 
        electric energy in interstate commerce at the wholesale and 
        retail levels.
            (10) Only Congress can ensure that a competitive retail 
        electricity market is established throughout the United States 
        on an expeditious but orderly basis. Regional and State 
        variations, however, require that State regulatory authorities 
        should receive deference in implementing competition and 
        consumer choice in retail electricity markets.
            (11) Customers of all utilities, whether served by 
        regulated or nonregulated electric utilities (such as 
        municipally owned utilities or rural cooperatives) should have 
        the same rights to receive the benefits of competition and 
        consumer choice.
            (12) In a competitive generation market, it is in the 
        national interest to continue to encourage the development of 
        renewable energy technologies in order to ensure energy 
        diversity and security and to protect the environment.
            (13) A national program is needed to promote renewable 
        energy development that is market driven and encourages 
        competition among different renewable technologies. This 
        program should be limited in scope and should be terminated 
        when the goals of the program are achieved.
            (14) Subjecting renewable energy technologies to the 
        discipline of the free market will better allocate renewable 
        resources and speed the commercialization of renewable 
        technologies than traditional centralized government resource 
        planning.
    (b) Purpose.--The purpose of this Act is to give all American 
electricity consumers the right to choose among competitive providers 
of electricity, in order to secure lower electricity rates, higher 
quality services, and a more robust United States economy.

SEC. 3. SEVERABILITY.

    If any provision of this Act, or the application of such provision 
to any person or circumstance, shall be held invalid, the remainder of 
the Act, and the application of such provision to persons or 
circumstances other than those as to which it is held invalid, shall 
not be affected thereby.

          TITLE I--COMPETITIVE RETAIL ELECTRIC ENERGY SERVICE

SEC. 101. DEFINITIONS.

    For purposes of this title:
            (1) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (2) The terms ``State regulatory authority'', ``State 
        regulated electric utility'' and ``nonregulated electric 
        utility'' have the same meaning as such terms have in the 
        Public Utility Regulatory Policies Act, as provided by section 
        3 of that Act.
            (3) The term ``retail electric energy services'' means each 
        of the following:
                    (A) electric energy sold for ultimate consumption.
                    (B) Aggregating or marketing electric energy for 
                sale for ultimate consumption.
                    (C) Billing and metering services and equipment for 
                electric energy sold for ultimate consumption.
                    (D) Energy management services and equipment for 
                electric energy sold for ultimate consumption.
                    (E) Any other electric service or equipment for 
                which an alternative to that provided by an electric 
                utility is offered to an electric utility retail 
                customer of such utility by any person other than such 
                utility.
            (4) The term ``electric utility retail customer'' means a 
        person who purchases retail electric energy services.
            (5) The term ``regulated electric utility retail customer'' 
        means an electric utility retail customer who is served by the 
        local distribution system of a State regulated electric 
        utility.
            (6) The term ``nonregulated electric utility retail 
        customer'' means an electric utility retail customer who is 
        served by the local distribution system of a nonregulated 
        electric utility.
            (7) The term ``affiliate'' when used with respect to an 
        electric utility means any person that controls, is controlled 
        by, or is under common control with, such utility.
            (8) The term ``renewable energy'' means electricity 
        generated from organic waste, biomass, dedicated energy crops, 
        landfill gas, geothermal, solar or wind resources.
            (9) The term ``Renewable Energy Credit'' means a tradable 
        certificate of proof that one unit (as determined by the 
        Commission) of renewable energy was generated by any person.
            (10) The term ``electric generator'' means a person 
        generating electric energy.
            (11) the term ``State'' means any State and the District of 
        Columbia.

SEC. 102. CUSTOMER CHOICE.

    By no later than December 15, 2000, all electric utility retail 
customers shall have the right to purchase retail electric energy 
services from any person offering to provide those services to such 
customers.

SEC. 103. RETAIL COMPETITION FOR STATE REGULATED ELECTRIC UTILITIES.

    (a) State Election.--A State may elect to establish, by no later 
than December 15, 2000, retail electric service choice in accordance 
with this Act for retail customers of State regulated electric 
utilities in such State. Such election shall be made through submission 
by the State regulatory authority exercising ratemaking jurisdiction 
over such utilities of a notice to establish retail electric service 
choice to the Commission within 6 months after the enactment of this 
section. If, within such 6-month period, the State regulatory authority 
notifies the Commission that additional legislative authority is needed 
in order for the State regulatory authority to make such an election, 
the 6 month date shall be extended to a date 2 years after the 
enactment of this section.
    (b) Customer Choice and Nondiscriminatory Access.--If a State 
elects to establish retail electric service choice for State regulated 
electric utility customers, the State regulatory authority exercising 
ratemaking authority over each State regulated electric utility in the 
State shall establish such rules as will provide for each of the 
following:
            (1) All State regulated electric utility retail customers 
        of all State regulated utilities under the ratemaking 
        jurisdiction of the State regulatory authority shall be able to 
        purchase retail electric energy services from any person 
        offering to provide those services to such customers.
            (2) Any person seeking to provide any retail electric 
        energy service to such customers shall have reasonable and 
        nondiscriminatory access on an unbundled basis, for the 
        purposes of providing such service, to local distribution 
        facilities owned or operated by all such State regulated 
        utilities. Access to local distribution facilities shall be 
        provided under rates, terms, and conditions that are just, 
        reasonable and not unduly discriminatory and that permit the 
recovery by the facility owner or operator of all costs incurred in 
connection with the local distribution service and necessary ancillary 
services. The local distribution services provided shall be at least 
equal in quality to those provided by the utility to itself or to any 
affiliate of the utility.
            (3) The owner or operator of the local distribution 
        facilities shall be prohibited from using any revenue from such 
        facilities to subsidize other services.
The State regulatory authority shall establish an effective date for 
the application of the requirements set forth in paragraphs (1) through 
(3) for all State regulated electric utilities subject to the 
jurisdiction of such State regulatory authority. Such date (hereinafter 
in this section referred to as the ``effective date for retail electric 
service choice'') shall not be later than December 15, 2000.
    (c) Pricing Flexibility; Incentive-Based Rate Regulation.--Each 
State regulatory authority that makes an election to establish retail 
electric service choice for State regulated electric utility retail 
customers shall implement, on the effective date of retail electric 
service choice for customers of State regulated utilities subject to 
the jurisdiction of such State regulatory authority, appropriate 
flexible pricing procedures and incentive-based rate regulation for 
each retail electric energy service provided by each State regulated 
electric utility. Such procedures shall afford the utility the 
opportunity to respond fairly to competition.
    (d) Termination of Price and Certain Other Regulation.--Each State 
regulatory authority that makes an election to establish retail 
electric service choice for State regulated electric utility retail 
customers shall, on the effective date of retail electric service 
choice for customers of State regulated utilities subject to the 
jurisdiction of such State regulatory authority, cease to carry out 
each of the following with respect to any entity that is not providing 
local distribution services to such customers:
            (1) Regulation of the prices for retail electric energy 
        services provided by such entity to such customers.
            (2) Requiring such entity to file a schedule of charges for 
        retail electric energy services provided by such entity to such 
        customers.
            (3) Requiring such entity to file cost or revenue 
        projections for retail electric energy services provided by 
        such entity to such customers.
            (4) Regulation of depreciation charges for facilities used 
        by such entity to provide retail electric energy services to 
        such customers.
Each such State regulatory authority shall also cease to carry out the 
activities referred to in paragraphs (1) through (4), and cease to 
implement subsection (c), with respect to any retail electric energy 
service provided within a geographic area by a State regulated electric 
utility that is providing local distribution services within such area 
if the State regulatory authority determines that such service is 
subject to effective competition.
    (e) Earlier Adoption of Customer Choice.--Nothing in this title 
shall be construed to prohibit any State regulatory authority from 
establishing or enforcing any rules or regulations relating to retail 
electric service competition prior to December 15, 2000, or to require 
any State regulatory authority to establish or enforce any rules or 
regulations relating to retail electric service competition prior to 
December 15, 2000.
    (f) Consideration of Certain Terms and Conditions.--Each State 
regulatory authority that makes an election to establish retail 
electric service choice for State regulated electric utility retail 
customers shall consider each of the following terms and conditions and 
make a determination concerning whether or not it is appropriate to 
apply such terms and conditions to the local distribution or sale of 
retail electric energy services to carry out the purposes of this Act:
            (1) Terms and conditions intended to insure that adequate 
        electric service is available on a competitively neutral and 
        nondiscriminatory basis to all customers served by the retail 
        distribution system concerned.
            (2) Terms and conditions designed to ensure and enhance the 
        reliability of electric service to all electric energy 
        consumers.
            (3) Terms and conditions allowing any electric utility 
        subject to the ratemaking jurisdiction of such State regulatory 
        authority to recover costs incurred prior to July 11, 1996.
            (4) Terms and conditions to promote electric energy 
        efficiency, conservation, and environmental programs.
Such terms and conditions may only be imposed on a nondiscriminatory 
and competitively neutral basis.

SEC. 104. RETAIL COMPETITION FOR NONREGULATED ELECTRIC UTILITIES.

    (a) Nonregulated Utility Election.--A nonregulated electric utility 
may elect to establish retail electric service choice for its 
customers. Such election shall be made through submission of a notice 
to establish retail electric service choice to the State regulatory 
authority for the State in which such nonregulated utility is located 
within 6 months after the enactment of this section. If, within such 6-
month period, the utility notifies the State regulatory authority that 
additional legislative authority is needed in order for the utility to 
make such an election, the 6 month date shall be extended to a date 2 
years after the enactment of this section. If a nonregulated electric 
utility does not elect to establish retail electric service choice for 
its customers within the required period, such utility shall be subject 
to the election made under section 103 by the State regulatory 
authority that has ratemaking authority for State regulated electric 
utilities in the State.
    (b) Customer Choice and Nondiscriminatory Access.--If a 
nonregulated electric utility elects to establish retail electric 
service choice for its retail electric customers, the utility shall 
establish such rules as will provide for each of the following:
            (1) All nonregulated electric utility retail customers of 
        the utility shall be able to purchase retail electric energy 
        services from any person offering to provide those services to 
        such customers.
            (2) Any person seeking to provide retail electric energy 
        services to such customers shall have reasonable and 
        nondiscriminatory access on an unbundled basis, for the 
        purposes of providing such services, to all local distribution 
        facilities owned or operated by the utility. Access to local 
        distribution facilities shall be provided under rates, terms, 
        and conditions that are just, reasonable and not unduly 
        discriminatory and that permit the recovery by the utility of 
        all costs incurred in connection with the local distribution 
        services and necessary associated services. The local 
        distribution services provided shall be at least equal in 
        quality to those provided by the utility to itself or to any 
        affiliate of the utility.
            (3) The utility shall be prohibited from using any revenue 
        from local distribution facilities to subsidize retail electric 
        services provided by such utility to any person.
The nonregulated electric utility shall establish an effective date for 
the application of the requirements set forth in paragraphs (1) through 
(3). Such date (hereinafter in this section referred to as the 
``effective date for retail electric service choice'') shall not be 
later than December 15, 2000.
    (c) Earlier Adoption of Customer Choice.--Nothing in this title 
shall be construed to prohibit any nonregulated utility from 
establishing or enforcing any rules or regulations relating to retail 
electric service competition prior to December 15, 2000, or to require 
any nonregulated utility to establish or enforce any rules or 
regulations relating to retail electric service competition prior to 
December 15, 2000.
    (d) Consideration of Certain Terms and Conditions.--Each 
nonregulated electric utility that makes an election to establish 
retail electric service choice for its customers shall consider each of 
the following terms and conditions and make a determination concerning 
whether or not it is appropriate to apply such terms and conditions to 
the local distribution or sale of retail electric energy services to 
carry out the purposes of this Act:
            (1) Terms and conditions intended to insure that adequate 
        electric service is available on a competitively neutral and 
        nondiscriminatory basis to all customers served by the retail 
        electric distribution system concerned.
            (2) Terms and conditions designed to ensure and enhance the 
        reliability of electric service to all retail electric 
        customers of the utility.
            (3) Terms and conditions allowing the nonregulated electric 
        utility to recover investment costs incurred prior to July 11, 
        1996.
            (4) Terms and conditions to promote electric energy 
        efficiency, conservation, and environmental programs.
Such terms and conditions may only be imposed on a nondiscriminatory 
and competitively neutral basis.
    (e) Preference Power.--No person may resell electric energy 
purchased by such person pursuant to a long-term firm power contract 
from any Federal power marketing authority to any other person not 
directly served by retail distribution facilities owned or operated by 
such person.

SEC. 105. JURISDICTION OF STATE COURTS.

    In addition to the prohibitions on Federal court jurisdiction set 
forth in section 1342 of title 28, notwithstanding any other provision 
of law, no court of the United States shall have jurisdiction over any 
action arising under any provision of section 102, 103, 104, or 110 
except for review of any action in the Supreme Court of the United 
States in accordance with sections 1257 and 1258 of title 28 of the 
United States Code. Any person may bring an action in the appropriate 
State court to enforce the requirements of sections 102, 103, 104, and 
110. Except for Supreme Court review, any appeal, review, or other 
action in State court shall be pursuant to any applicable State 
procedures.

SEC. 106. FERC AUTHORITY FOR CERTAIN UTILITIES.

    (a) In General.--If an election under section 103 or 104 to 
establish retail electric service choice is not made by the date set 
forth in section 103(a) or 104(a) for a State regulated or a 
nonregulated electric utility, the Commission shall exercise the 
authorities that would otherwise be exercised by the State regulatory 
authority or nonregulated electric utility under section 103 and 104 as 
if such election had been made by such date. The exercise of such 
authorities pursuant to this section shall preempt any State law that 
is inconsistent with the exercise of such authorities.
    (b) States Without State Regulatory Authorities.--For any State 
without a State regulatory authority exercising ratemaking jurisdiction 
over State regulated electric utilities, if a nonregulated electric 
utility elects not to establish retail electric service choice for its 
customers or fails to submit an election within the required period, 
the Commission shall exercise the authorities of section 104 that would 
otherwise be exercised by the nonregulated electric utility if the 
nonregulated electric utility had elected to establish retail electric 
service choice.
    (c) Federal Courts.--The provisions of section 105 (relating to 
jurisdiction of State courts) shall not apply to any action arising 
under this section. Any person aggrieved by any action of the 
Commission pursuant to this section may bring an action in the 
appropriate United States district court for appropriate relief.

SEC. 107. ANTITRUST LAWS.

    Nothing in this title or the amendments made by this title shall be 
construed to modify, impair, or supersede the applicability of any of 
the antitrust laws. As used in this section 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.

SEC. 108. FERC AUTHORITY FOR TRANSMISSION.

    (a) In General.--The Commission may, by rule or order, require a 
transmitting utility (as defined in the Federal Power Act) to provide 
transmission of electric energy in interstate commerce (including any 
enlargement of transmission capacity necessary to provide such service) 
under such terms and conditions as the Commission finds are necessary 
and appropriate to ensure that customers have access to transmission 
services under terms and conditions (including charges) that are 
comparable to those under which the transmitting utility uses its own 
system and are otherwise in the public interest.
    (b) Limitation.--The Commission may not exercise the authority of 
subsection (a) to require the transmission of electric energy to any 
electric utility retail customer prior to the effective date for retail 
electric choice (as determined under section 103 or 104) for the 
electric utility that provides local distribution service to such 
customer.

SEC. 109. EFFECT ON OTHER AUTHORITIES.

    Nothing in this title shall be construed to prohibit the Commission 
from using any authority of the Commission under Part II of the Federal 
Power Act in fulfilling the requirements of this title, to the extent 
that such authority is not exercised in a manner inconsistent with the 
provisions of this title.

SEC. 110. BARRIERS TO ENTRY.

    (a) Nondiscriminatory Access.--After the effective date for retail 
electric choice (as determined under section 103 or 104) for an 
electric utility, no State or local legal requirement (other than a 
facility siting requirement) may prohibit or have the effect of 
prohibiting any entity from offering to any electric utility retail 
customer of such utility any retail service related to electric energy 
or from providing any retail electric energy service directly or 
indirectly to any such customer.
    (b) State Regulatory Authority.--A State may, under State law, 
impose requirements relating to retail electric energy services 
necessary to preserve universal service, protect public safety and 
welfare, ensure the continued quality of electric services and 
safeguard the rights to consumers the extent such requirements are 
imposed on a nondiscriminatory and competitively neutral basis.
    (c) Parity of Franchise and Other Charges.--A State or local 
government, under State law, may impose or collect any franchise, 
license, permit fee, or equivalent thereof, from any person providing 
any retail electric energy service as a condition for operating in the 
State or locality, only to the extent such charge is imposed on a 
nondiscriminatory and competitively neutral basis.

SEC. 111. ILLEGAL CHANGES IN CUSTOMER SELECTIONS.

    (a) Prohibition.--No person shall submit or execute a change in the 
selection made by a regulated utility retail customer or nonregulated 
utility retail customer of a provider of electric energy services 
except in accordance with such verification procedures as the 
Commission shall prescribe. Nothing in this section shall preclude any 
State regulatory authority from proscribing such additional procedures 
regarding changes in customer selection with respect to intrastate 
retail electric energy services.
    (b) Liability for Charges.--Any person who violates the 
verification procedures described in subsection (a) and that collects 
charges from a customer shall be liable--
            (1) to the customer in an amount equal to all charges paid 
        by such customer after violation; and
            (2) to the provider of electric energy service previously 
        selected by the customer in an amount equal to all charges paid 
        by such customer after violation.
The Commission may prescribe procedures for the recovery of the amounts 
referred to in paragraphs (1) and (2). The remedies provided by this 
section are in addition to any other remedies available by law.

SEC. 112. RENEWABLE ENERGY.

    (a) Minimum Renewable Generation Requirement.--For calendar years 
after the effective date for retail electric choice (as determined 
under section 103) for State regulated electric utilities in any State, 
each electric generator in the State that sells electric energy to any 
other person shall submit to the Commission Renewable Energy Credits in 
an amount equal to the required annual percentage of the total electric 
energy generated by such generator in the preceding calendar year. 
Nothing in this section shall be construed to prohibit any State from 
requiring additional renewable energy generation in that State under 
any program adopted by the State.
    (b) Required Annual Percentage.--From the first calendar year 
following the effective date for retail electric choice (as determined 
under section 103) for State regulated electric utilities in a State 
through calendar year 2004, the required annual percentage for each 
electric generator in the State shall be 2 percent. Thereafter the 
required annual percentage for each such generator shall be as set 
forth in the following table :

                                                                Minimum
Calendar year:                                              Percentage:
    2005..........................................                   3 
    2010..........................................                   4 
    (c) Submission of Credits.--An electric generator may satisfy the 
requirements of subsection (a) through the submission of--
            (1) Renewable Energy Credits issued by the Commission under 
        this section for renewable energy generated by such electric 
        generator in such calendar year.
            (2) Renewable Energy Credits issued by the Commission under 
        this section to any other electric generator for renewable 
        energy generated in such calendar year by such other generator 
        and acquired by such electric generator.
            (3) Any combination of the foregoing.
A Renewable Energy Credit that is submitted to the Commission for any 
year may not be used for any other purposes thereafter.
    (d) Issuance of Renewable Energy Credits.--
            (1) In general.--The Commission shall establish, by rule 
        after notice and opportunity for hearing but not later than 120 
        days after the enactment of this Act, a program to issue 
        Renewable Energy Credits to electric generators. Renewable 
        Energy Credits shall be identified by type of generation and 
        facility location (State). Under such program, the Commission 
        shall issue one Renewable Energy Credit to any person who 
        generates in any State (in any year after the calendar year 
        after the effective date for retail electric choice (as 
        determined under section 103) for State regulated electric 
        utilities in the State) one unit of electric energy through the 
        use of renewable energy generation.
            (2) Fees.--The Commission shall impose and collect a fee on 
        recipients of Renewable Energy Credits in an amount equal to 
        the administrative costs of issuing, recording, monitoring the 
        sale or exchange, and tracking of such credits. The failure or 
        refusal of any person to pay such fee shall be subject to a 
        civil penalty equal to 2 and one-half times the amount of the 
        unpaid fees. The Commission shall bring an action in the 
        appropriate United States district court to collect any unpaid 
        fees and to impose a civil penalty on any person who fails or 
        refuses to pay such fee imposed under this section.
            (3) Purpa contracts.--In the case of renewable energy sold 
        by the generator to an electric utility under a contract 
        (including but not limited to a contract entered into before 
        the date of enactment of this Act) that is subject to section 
        210 of the Public Utility Regulatory Policies Act of 1978, for 
        the duration of such contract, the utility shall be treated for 
        purposes of the other provisions of this section as the 
        generator of such energy unless such generator and utility 
        agree to terminate such contract prior to the expiration date 
        set forth in the contract.
    (e) Sale or Exchange.--Renewable Energy Credits may be sold or 
exchanged by the person to whom issued or by any other person who 
acquires the credit. A Renewable Energy Credit for any year that is not 
used to satisfy the minimum renewable generation requirement of 
subsection (a) for that year may be not be carried forward for use in 
another year. The Commission shall promulgate regulations to provide 
for the issuance, recording, monitoring the sale or exchange, and 
tracking of such credits. The Commission shall maintain records of all 
sales and exchanges of credits. No such sale or exchange shall be valid 
unless recorded by the Commission.
    (f) Enforcement.--The Commission shall bring an action in the 
appropriate United States district court to impose a civil penalty on 
any person who fails or refuses to comply with subsection (a). The 
failure or refusal of any person to submit any required quantity of 
Renewable Energy Credits shall be subject to a civil penalty of not 
more than 2 and one-half times the estimated national average market 
value (as determined by the Commission) for the calendar year concerned 
of such quantity of Renewable Energy Credits.
    (g) Rules and Regulations.--The Commission shall promulgate such 
rules and regulations as may be necessary to carry out this section, 
including such rules and regulations requiring the submission of such 
information as may be necessary to verify the annual electric energy 
generation and renewable energy generation of any person applying for 
Renewable Energy Credits under this section or to verify and audit the 
validity of Renewable Energy Credits submitted by any person to the 
Commission.
    (h) Annual Reports.--The Commission shall gather available data and 
devise measures to gauge compliance with the requirements of this 
section and the success of the National Renewable Energy Trading 
Program established under this section. On an annual basis not later 
than May 31 of each year, the Commission shall publish a report for the 
previous year that includes compliance data, National Renewable Energy 
Trading Program results, and steps taken to improve the Program 
results.
    (i) Sunset.--The requirements of this section shall cease to apply 
90 days after the Commission certifies in the annual report under 
subsection (h) that for the preceding year the market value of 
Renewable Energy Credits or the number of credits traded or both has 
declined to such nominal levels that the costs incurred by the 
Commission for issuance, recording, monitoring sale or exchange, and 
tracking of credits is no longer justified.

SEC. 113. JURISDICTIONAL DETERMINATIONS OF TRANSMISSION AND LOCAL 
              DISTRIBUTION FACILITIES.

    Section 201(b) of the Federal Power Act is amended by inserting the 
following new paragraphs after paragraph (1) and redesignating 
paragraph (2) as paragraph (7):
    ``(2)(A) Any person that provides unbundled retail transmission or 
distribution of electric energy in interstate commerce shall obtain a 
jurisdictional determination from the Commission as to which facilities 
owned, controlled, or operated by such person are or will be facilities 
used for retail transmission in interstate commerce and therefore 
subject to Commission jurisdiction, and which facilities are or will be 
used for local distribution and therefore subject to State 
jurisdiction.
    ``(B) A person providing services referred to in subparagraph (A) 
as of the date of enactment of this paragraph shall file, within 90 
days of the date of enactment of this paragraph, an application for 
jurisdictional determination under this paragraph. The Commission, 
after consultation with representatives of affected State commissions, 
shall make a jurisdictional determination with respect to the 
facilities of such person no later than 18 months after the date the 
application is filed.
    ``(C) A person that first provides services referred to in 
subparagraph (A) after the date of enactment of this paragraph shall 
file an application for jurisdictional determination under this 
paragraph no later than 90 days prior to the date that unbundled retail 
transmission or distribution service is to commence. The Commission, 
after consultation with representatives of the affected State 
commissions, shall make a determination with respect to the facilities 
of such person no later than 1 year after the date the application is 
filed.
    ``(3) In making a jurisdictional determination under paragraph (2), 
the Commission shall consider the following nonexclusive list of 
factors as indicating that facilities constitute local distribution 
facilities subject to State jurisdiction:
            ``(A) Local distribution facilities normally are in close 
        proximity to retail customers.
            ``(B) Local distribution facilities are primarily radial in 
        character.
            ``(C) Power flows into, but rarely out of, local 
        distribution systems.
            ``(D) When power enters a local distribution system, it is 
        not reconsigned or transported on to some other market.
            ``(E) Power entering a local distribution system is 
        consumed in a comparatively restricted geographical area.
            ``(F) Meters are based at the transmission/local 
        distribution interface to measure flows into the local 
        distribution system.
            ``(G) Local distribution systems will be of reduced 
        voltage.
The Commission shall also consider the historical uses of facilities 
used to deliver electric energy to end users and other technical 
factors that may be relevant to a jurisdictional determination. The 
Commission shall give deference to State commission recommendations 
that take into account the factors described in this subsection and 
shall take into account other factors identified by a State commission 
as relevant to a jurisdictional determination with respect to 
facilities located in such State.
    ``(4) Once the Commission makes a jurisdictional determination 
under paragraph (2), such determination may not be modified unless the 
Commission determines there is a material change in facts or 
circumstances since the time the prior determination was made, or finds 
that prior representations or facts were incorrect. The Commission may 
modify a prior jurisdictional determination only after consultation 
with representatives of the affected State commission.
    ``(5) Any person, State, or State commission aggrieved by an order 
making a jurisdictional determination under paragraph (2) may obtain a 
review of such order in the Circuit Court of Appeals of the United 
States for any circuit wherein the person to which the order relates is 
located or has its principal place of business or in the United States 
Court of Appeals for the District of Columbia Circuit, pursuant to 
section 313.''

          TITLE II--PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

SEC. 201. APPLICATION OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
              1935.

    The Public Utility Holding Company Act of 1935 shall cease to apply 
to any public utility company and to any holding company of such public 
utility company if each State in which such public utility company is 
providing retail electric or natural gas distribution service and each 
State in which any subsidiary, affiliate, or associate company of such 
public utility company and of such holding company is providing retail 
electric or natural gas distribution service--
            (1) determines that the retail customers of such public 
        utility company and of each such subsidiary, affiliate, or 
        associate company are able to purchase at retail electric 
        energy services and natural gas from any person offering those 
        services to the purchaser on a competitively neutral and 
        nondiscriminatory basis; and
            (2) notifies the Commission and the Securities and Exchange 
        Commission of such determination.

SEC. 202. DEFINITIONS.

    For purposes of this title:
            (1) The term ``person'' means an individual or company.
            (2) The term ``company'' means a corporation, joint stock 
        company, partnership, association, business trust, organized 
        group of persons, whether incorporated or not, or a receiver or 
        receivers, trustee or trustees of any of the foregoing.
            (3) The term ``electric utility company'' means any company 
        that owns or operates facilities used for the generation, 
        transmission, or distribution of electric energy for sale.
            (4) The term ``gas utility company'' means any company that 
        owns or operates facilities used for the distribution at retail 
        (other than the distribution only in enclosed portable 
        containers) of natural or manufactured gas for heat, light, or 
        power.
            (5) The term ``public utility company'' means an electric 
        utility company or a gas utility company but does not mean a 
        qualifying facility as defined in the Public Utility Regulatory 
        Policies Act of 1978, or an exempt wholesale generator or a 
        foreign utility company as defined by the Energy Policy Act of 
        1992.
            (6) 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 securities 
        of a public utility company or of a holding company of any 
        public utility company; and (B) any person, determined by the 
        Commission, after notice and opportunity for hearing, to 
        exercise directly or indirectly (either alone or pursuant to an 
        arrangement or understanding with 1 or more other persons) such 
        a controlling influence over the management or policies of any 
        public utility or holding company as to make it necessary or 
        appropriate for the protection of consumers with respect to 
        rates that such person be subject to the obligations, duties, 
        and liabilities imposed in this title upon holding companies.
            (7) The term ``subsidiary company'' of a holding company 
        means (A) any company 10 percent or more of the outstanding 
        voting securities of which are directly 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 opportunity 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 1 or more 
        other persons) so as to make it necessary or appropriate for 
the protection of consumers with respect to rates that such person be 
subject to the obligations, duties, and liabilities imposed in this 
title upon subsidiary companies of holding companies.
            (8) The term ``holding company system'' means a holding 
        company together with its subsidiary companies.
            (9) The term ``associate company'' of a company means any 
        company in the same holding company system with such company.
            (10) The term ``affiliate'' of a company means (A) any 
        company 5 percent or more of whose outstanding voting 
        securities are owned, controlled, or held with power to vote, 
        directly or indirectly, by such company; and (B) any person or 
        class of persons that the Commission determines, after 
        appropriate notice and opportunity for hearing, to stand in 
        such relation, directly or indirectly, to such company that 
        there is likely to be such an absence of arm's length 
        bargaining in transactions between them as to make it necessary 
        or appropriate in the public interest or for the protection of 
        consumers that such person be subject to the obligations, 
        duties, and liabilities imposed in this title upon affiliates 
        of a company.
            (11) The term ``voting security'' means any security 
        presently entitling the owner or holder thereof to vote in the 
        direction or management of the affairs of a company.
            (12) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (13) 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 law of such State has jurisdiction to regulate 
        public utility companies.

SEC. 203. APPLICATION OF TITLE.

    No provision in this title shall apply to, or be deemed to 
include--
            (1) the United States,
            (2) a State or any political subdivision of a State,
            (3) any foreign governmental authority not operating in the 
        United States,
            (4) any agency, authority, or instrumentality of any of the 
        foregoing, or of any corporation that is wholly owned, directly 
        or indirectly by 1 or more of the foregoing, or
            (5) any officer, agent, or employee of any of the foregoing 
        acting as such in the course of his official duty.

SEC. 204. EXEMPTION AUTHORITY.

    (a) Rulemaking.--Not later than 90 days after the enactment of this 
Act, the Commission shall promulgate a final rule to exempt from the 
requirements of section 205 any person that is a holding company, 
solely with respect to--
            (1) one or more qualifying facilities under the Public 
        Utility Regulatory Policies Act of 1978;
            (2) one or more exempt wholesale generators; or
            (3) one or more foreign utility companies.
    (b) Other Authority.--If, upon application or upon its own motion, 
the Commission finds that the books, records, accounts, memoranda, and 
other records of any person are not relevant to the jurisdictional 
rates of a public utility company, or if the Commission finds that any 
class of transactions is not relevant to the jurisdictional rates of a 
public utility company, the Commission shall exempt such person or 
transaction from the requirements of section 205.

SEC. 205. FEDERAL ACCESS TO BOOKS AND RECORDS.

    (a) Holding Companies and Subsidiaries.--Every holding company and 
associate company thereof shall maintain, and make available to the 
Commission, such books, records, accounts, and other documents as the 
Commission deems relevant to costs incurred by a public utility company 
that is an associate company of such holding company and necessary or 
appropriate for the protection of consumers with respect to rates.
    (b) Affiliates and Subsidiaries.--Every affiliate of a holding 
company or of any subsidiary company thereof shall maintain, and make 
available to the Commission, such books, records, accounts, and other 
documents with respect to any transaction that is subject to this 
title, as the Commission deems relevant to costs incurred by a public 
utility company that is an associate company of such holding company 
and necessary or appropriate for the protection of consumers with 
respect to rates.
    (c) Authority To Examine.--The Commission may examine the books, 
records, accounts, and other documents of any company in a holding 
company system, or any affiliate thereof, as the Commission deems 
relevant to costs incurred by a public utility company within such 
holding company system and necessary or appropriate for the protection 
of consumers with respect to rates. No member, officer, or employee of 
the Commission shall divulge any fact or information that may come to 
his knowledge during the course of examination of books, records, 
accounts, or other documents as hereinbefore provided, except insofar 
as he may be directed by the Commission or by a court.
    (d) Other Authority.--Nothing in this section shall be construed to 
limit the Commission's authority under section 301 of the Federal Power 
Act.

SEC. 206. STATE ACCESS TO BOOKS AND RECORDS.

    (a) Authority.--Upon the written request of a State commission 
having jurisdiction to regulate a public utility company in a holding 
company system, and subject to such terms and conditions as may be 
necessary and appropriate to safeguard against unwarranted disclosure 
to the public of any trade secrets or sensitive commercial information, 
a holding company or its associate company or affiliate thereof, 
wherever located, shall produce for inspection such books, records, 
accounts, and other documents as have been identified in reasonable 
detail in a proceeding before the State commission and as are relevant 
to costs incurred by such public utility company and are necessary for 
the effective discharge of the State commission's responsibilities with 
respect to such proceeding.
    (b) Savings.--Nothing in this section shall preempt applicable 
State law concerning the provision of books, records, accounts, and 
other documents, or in any way limit State's rights to obtain books, 
records, accounts, and other documents under Federal law, contracts, or 
otherwise.

SEC. 207. AFFILIATE TRANSACTIONS.

    Nothing in this Act shall preclude the Commission or a State 
commission from exercising its jurisdiction under otherwise applicable 
law to determine whether a public utility company may recover in rates 
any costs of an activity performed by an associate company, or any 
costs of goods or services acquired by such public utility company from 
an associate company.

SEC. 208. EFFECT ON OTHER REGULATION.

    Nothing in this title shall preclude a State commission from 
exercising its jurisdiction under otherwise applicable law to protect 
utility consumers.

SEC. 209. ENFORCEMENT.

    The Commission shall have the same powers as set forth in sections 
206 through 317 of the Federal Power Act (16 U.S.C. 825d-825p) to 
enforce the provisions of this Act.

SEC. 210. SAVING PROVISION.

    Nothing in this title prohibits a person from engaging in 
activities in which it is legally engaged or authorized to engage on 
the date on which the Public Utility Holding Company Act of 1935 ceases 
to apply to such person pursuant to this title, provided that it 
complies with the terms of any authorization, whether by rule or by 
order.

SEC. 211. IMPLEMENTATION.

    The Commission shall promulgate regulations necessary or 
appropriate to implement this title not later than one year after the 
date of enactment of this title.

SEC. 212. TRANSFERS.

    All books, records, accounts, and other documents that relate 
primarily to the functions hereby vested in this Commission shall be 
transferred from the Securities and Exchange Commission to the 
Commission.

SEC. 213. CONFORMING CHANGE.

    Section 318 of the Federal Power Act, (16 U.S.C. 825q), is 
repealed.

       TITLE III--PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978

SEC. 301. APPLICATION OF PURPA PROVISIONS.

    Section 210 of the Public Utility Regulatory Policies Act of 1978 
is amended by adding the following new subsection at the end thereof:
    ``(m) Utilities Subject to Retail Competition.--
            ``(1) In general.--The preceding provisions of this section 
        requiring electric utilities to offer to purchase electric 
        energy from qualifying cogeneration facilities and qualifying 
        small power production facilities at the incremental cost to 
        the utility of alternative electric energy shall not apply to 
        an electric utility if the State--
                    ``(A) determines that the retail customers of such 
                utility are able to purchase retail electric energy 
                services (as defined in the Electric Consumers' Power 
                to Choose Act of 1996) from any person offering those 
                services to the purchaser on a competitively neutral 
                and nondiscriminatory basis; and
                    ``(B) notifies the Commission of such 
                determination.
            ``(2) Rights and remedies not affected.--Nothing in the 
        Electric Consumers' Power to Choose Act of 1996 affects the 
        rights or remedies of any party with respect to the purchase or 
        sale of electric energy or capacity from or to a facility 
        determined to be a qualifying small power production facility 
        or a qualifying cogeneration facility pursuant to this Act 
        pursuant to any contract in effect on July 11, 1996.''.
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