[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2988 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2988

   To facilitate the operation, maintenance, and upgrade of certain 
 federally owned hydroelectric power generating facilities, to ensure 
   the recovery of costs, and to improve the ability of the Federal 
 Government to coordinate its generating and marketing of electricity 
            with the non-Federal electric utility industry.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 9, 1997

Mr. Doolittle introduced the following bill; which was referred to the 
 Committee on Resources, and in addition to the Committees on Commerce 
and Transportation and Infrastructure, 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 facilitate the operation, maintenance, and upgrade of certain 
 federally owned hydroelectric power generating facilities, to ensure 
   the recovery of costs, and to improve the ability of the Federal 
 Government to coordinate its generating and marketing of electricity 
            with the non-Federal electric utility industry.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Power Marketing Act of 
1997''.

SEC. 2. PURPOSES.

    The purposes of this Act are:
            (1) To amend the Department of Energy Organization Act (91 
        Stat. 565; 42 U.S.C. 7101, et seq.) to clarify the authorities 
        of the Secretary of Energy regarding the Federal Power 
        Marketing Administrations.
            (2) To provide additional and more broadly distributed 
        benefits from Federal hydroelectric resources subject to 
        control by the Federal Power Marketing Administrations.
            (3) To eliminate the backlog of maintenance and improvement 
        projects at Federal hydroelectric generating facilities through 
        out sourcing such activities on a competitive basis.
            (4) To provide adequate funding, through user fees, for all 
        routine operation and maintenance requirements at Federal 
        hydroelectric generating projects, as well as those maintenance 
        and improvement projects that are not successfully outsourced.
            (5) To recover fully from Federal Power Marketing 
        Administration energy customers all costs incurred for the 
        generation and marketing of Federal energy sold to such 
        customers.

SEC. 3. RELATIONSHIP TO OTHER LAW.

    The provisions of this Act shall apply notwithstanding any 
provision to the contrary of the Act of June 17, 1902, ch. 1093, 
commonly known as the Reclamation Act of 1902, (32 Stat. 388, 43 U.S.C. 
371 et seq.) and all laws supplemental thereto; the Flood Control Act 
of 1944, Act of December 22, 1944 (58 Stat. 887, 16 U.S.C. 460d et 
seq.); the Bonneville Project Act of 1937, Act of August 20, 1937 (50 
Stat. 731, 16 U.S.C. 832 et seq.); the Federal Columbia River 
Transmission System Act, Act of October 18, 1974, Public Law 93-454 (88 
Stat. 1376, 16 U.S.C. 838 et seq.); and the Pacific Northwest Electric 
Power Planning and Conservation Act of 1980, Act of December 5, 1980, 
Public Law 96-501 (94 Stat. 2697, 16 U.S.C. 839); and section 2406 of 
the Energy Policy Act of 1992 (106 Stat. 3099, 16 U.S.C. 839d-1)

                  TITLE I--OPERATIONS AND MAINTENANCE

SEC. 101. OUTSOURCING OF MAINTENANCE AND IMPROVEMENT PROJECTS.

    (a) Inventory of Projects.--The Secretary of Energy, in cooperation 
with the Secretary of the Army (acting through the Chief of Engineers) 
and the Secretary of the Interior (acting through the Commissioner of 
Reclamation) shall develop and publish in the Federal Register on an 
annual basis an inventory of uncompleted projects for the maintenance 
and improvement of hydroelectric generating facilities owned by the 
United States and operated by the Department of the Army Corps of 
Engineers and the Bureau of Reclamation of the United States Department 
of the Interior. Such inventory shall include, but not be limited to, 
maintenance and capital improvement projects that will--
            (1) restore hydroelectric generating capacity that has been 
        degraded as a result of deferred maintenance or other reasons,
            (2) maintain existing generating facilities at their design 
        specifications, or
            (3) replace existing hydroelectric generating equipment 
        with more efficient equipment capable of increased 
        hydroelectric power generating capacity.
For each project contained in the inventory, the Secretary shall 
provide a statement of the baseline of annual hydroelectric generation 
produced from the project.
The initial inventory shall be published no later than 6 months after 
the date of the enactment of this Act.
    (b) Criteria and Procedures for Competitive Outsourcing of 
Maintenance and Improvement Projects.--The Secretary of Energy, in 
consultation with the Secretary of the Army (acting through the Chief 
of Engineers), and the Secretary of the Interior (acting through the 
Commissioner of Reclamation), shall develop and publish a notice in the 
Federal Register of a rulemaking to establish a process for competitive 
outsourcing of maintenance and improvement projects. Such process shall 
include--
            (1) performance specifications for the outsourcing of 
        maintenance and improvement projects, including minimum safety, 
        reliability and maintenance requirements;
            (2) any requirements necessary to ensure operational 
        compatibility of the maintenance and improvement project with 
        other aspects of Federal projects;
            (3) requirements for the contractor's proposed plan for 
        undertaking the maintenance and improvement projects, including 
        financing, management, environmental compliance, and power 
        marketing; and
            (4) any requirement to ensure that the Federal Government 
        incurs no significant costs or risks resulting from the 
        maintenance and improvement project.
The Secretary shall not prescribe engineering design specifications for 
the maintenance and improvement projects. The Secretary shall make 
available any supporting analysis and data for these projects. The 
Secretary shall permit access to facilities and records to prospective 
contractors for purposes of preparing proposals. Notice under this 
subsection shall be published for review and comment no later than 90 
days after the enactment of this Act.
    (c) Submission of Proposals for Maintenance and Improvement 
Projects.--The Secretary of the Army (acting through the Chief of 
Engineers) and the Secretary of the Interior (acting through the 
Commissioner of Reclamation) shall, within 30 days of final publication 
of each annual inventory under subsection (a), seek proposals from 
qualified contractors to undertake the maintenance and improvement 
projects identified in that inventory. Contractor proposals shall 
contain the information specified in the criteria and procedures of 
subsection (b), and shall provide a proposed bonus payment to the 
Federal Government for the right to undertake the maintenance and 
improvement project.
    (d) Awarding of Contracts for Maintenance and Improvement 
Projects.--(1) The Secretary concerned shall select a winning 
contractor from among the competing qualified proposals based upon the 
highest bid provided to the Government.
    (2) The Secretary shall provide the winning contractor the right to 
a contract to receive a comparable percentage of the total 
hydroelectric energy generated by the Federal hydroelectric generating 
facility concerned that represents the increase in generation benefit 
resulting from the Federal hydroelectric generating facility concerned 
that represents the increase in generation benefit resulting from the 
completion of the project. The percentage increase in hydroelectric 
generation shall be calculated as the difference between the estimated 
total hydroelectric generation (as specified pursuant to the last 
sentence of subsection (a) of section 101) for the Federal 
hydroelectric generation facility existing at the time of the inventory 
and the increased generation benefit resulting from implementation of 
the maintenance and improvement project. The contract shall not exceed 
the estimated useful life of the maintenance and improvement project.
    (3) The contract for hydroelectric generation shall constitute the 
sole and exclusive right of the contractor in the Federal hydroelectric 
generating asset. Ownership of all physical assets shall remain with 
the United States.
    (e) Provision for Maintenance and Improvement Projects That Are Not 
Outsourced.--If no proposals are received for particular maintenance 
and improvement projects, or if the proposals are determined to be 
unacceptable, the Secretary concerned may proceed with the proposed 
project under section 102, subject to a specific appropriation by 
Congress of funds for such purpose. The Secretary shall make public the 
basis for any such determination.
    (f) Unsolicited Proposals.--After publication of the inventory 
under subsection (a), any contractor may submit an unsolicited proposal 
to undertake a maintenance and improvement project at a Federal 
hydroelectric generating facility. Each unsolicited proposal shall 
document that the proposed maintenance and improvement project meets 
the criteria specified in subsection (b) and was not identified in the 
inventory developed under subsection (a). If the proper documentation 
is provided, the Secretary of the Army (acting through the Chief of 
Engineers) or the Secretary of the Interior (acting through the 
Commissioner of Reclamation), as the case may be, shall enter into a 
negotiated contract with such contractor within 120 days after receipt 
of the proposal without further competition. Such a contract shall 
provide for the contractor to undertake the proposed maintenance and 
improvement project in exchange for a contract for the percentage 
increase in hydroelectric generation achieved from such activity, 
calculated on the same basis as described in subsection (d). Such a 
contract shall be for a period of not to exceed 25 years or the 
estimated useful life of the maintenance and improvement project, 
whichever is less. The contractor shall make annual payments to the 
Federal Government based on a percentage of the revenue realized by the 
contractor from the sale of such hydroelectric generation. Such 
payments shall be made at the same rate as the annual average rate of 
interest paid by the United States Treasury on long-term securities of 
comparable maturity in the preceding year.
    (g) Authorization for Reprogramming of Funds From Existing 
Maintenance and Improvement Projects.--The Secretary of the Army 
(acting through the Chief of Engineers) or the Secretary of the 
Interior (acting through the Commissioner of Reclamation), as the case 
may be, shall include in the inventory developed under subsection (a) 
uncompleted maintenance and improvement projects that have received 
appropriations. Such Secretary may award contracts for the completion 
of such projects under the provisions of this section. Any unobligated 
or unexpended funds previously appropriated for such activities may be 
proposed for reallocation to other authorized purposes, subject to 
reprogramming procedures established in appropriations Acts.

SEC. 102. USER FEE FINANCING OF HYDROELECTRIC GENERATION OPERATIONS AND 
              MAINTENANCE.

    (a) Eligible Project Activities.--Routine operations and any 
maintenance or improvement projects that are not successfully 
outsourced pursuant to the provisions of section 101 shall be eligible 
for user fee financing under this section.
    (b) Establishment of Fees.--The Secretary of Energy shall establish 
a user fee to fully offset appropriations made for eligible 
hydroelectric generating maintenance and improvement projects described 
in subsection (a). The user fee shall be in the form of a surcharge on 
rates for electric energy and shall be collected from customers who 
purchase electric energy from the Federal Power Marketing 
Administration concerned. The user fee shall become effective at the 
beginning of the first fiscal year after enactment of this Act, and 
shall remain in effect for each fiscal year thereafter.
    (c) Amount of Fee.--The fee imposed for each project under this 
section shall be established in appropriations Acts at a level such 
that the estimated aggregate receipts from the fee during a fiscal year 
shall be equal to the amounts made available by the Congress in such 
appropriation Acts for the project concerned.
    (d) Relationship to Full Cost Recovery.--(1) Any costs that are 
paid through appropriations offset by user fees shall be excluded from 
the power rate requirements of title II of this Act and any electric 
energy rates established therefrom.
    (2) Any costs for hydroelectric power operation and maintenance, 
improvements or upgrades that are paid through any means other than 
those provided in sections 101 and this section shall be included in 
the power rate requirements of title II of this Act, and payments for 
such costs shall not be used to reduce rates for electric energy.

SEC. 103. CUSTOMER PARTICIPATION.

    In the implementation of the provisions of sections 101 and 102, 
the Secretary of Energy shall consult with customer groups and solicit 
their views and recommendations. The Secretary shall seek to ensure 
that the views of customer groups are appropriately reflected in plans 
for implementation of these authorities.

SEC. 104. 5-YEAR PLANS.

    The Bureau of Reclamation, the United States Army Corps of 
Engineers, and the Administrators of the Federal Power Marketing 
Administrations shall jointly develop, and make available to the 
public, 5-year plans for the operation, maintenance, and replacement of 
all hydroelectric facilities managed by such agencies.

                            TITLE II--RATES

SEC. 201. ACCOUNTING AND COST RECOVERY.

    (a) In General.--Notwithstanding any other provision of law, the 
Secretary of Energy shall implement section 302 of the Department of 
Energy Organization Act of 1977 (91 Stat. 578; 42 U.S.C. 7152) so as to 
ensure that the Federal Power Marketing Administrations provide for the 
sale and disposition of Federal energy at rates set in conformance with 
this section.
    (b) Procedures.--Not later than 6 months after the date of 
enactment of this Act, the Secretary of Energy shall promulgate rules 
containing each of the following:
            (1) Accounting principles and requirements.--Procedures to 
        ensure that the Federal Power Marketing Administrations utilize 
        the same accounting principles and requirements as are 
        applicable to public utilities pursuant to parts II and III of 
        the Federal Power Act (16 U.S.C. 792 and following) with 
        respect to accounting for revenue, expenses, investments, and 
        depreciation.
            (2) Rates.--Procedures for setting rates for the sale and 
        disposition of Federal energy which--
                    (A) use the procedures and accounts established 
                pursuant to paragraph (1);
                    (B) use the appropriate ratemaking standards and 
                requirements generally applicable to public utilities 
                pursuant to part II of the Federal Power Act (16 U.S.C. 
                824 et seq.); and
                    (C) ultimately recover from Federal Power Marketing 
                Administration electric energy customers all costs 
                incurred by such Federal Power Marketing Administration 
                (or other Federal agency, where applicable) for the 
                generation and marketing of Federal energy sold to such 
                customers.
            (3) Stranded costs.--The Secretary of Energy may delay the 
        effective date of the procedures under paragraph (2) for not 
        more than one year until appropriate stranded costs mechanisms 
        are developed.
            (4) Compliance.--Procedures for the filing of complaints 
        with the Federal Energy Regulatory Commission by interested 
        persons seeking to ensure compliance with the procedures of 
        this section.
            (4) Administrative reconciliation.--Procedures to insure 
        that the Bureau of Reclamation, the United States Army Corps of 
        Engineers, and the Administrators of the Federal Power 
        Marketing Administrations maintain a consistent set of books 
        and records for purposes of repayment obligations.
    (c) New Rates for Sale of Energy.--Not later than 1 year after the 
enactment of this Act, each Federal Power Marketing Administration 
shall propose rates for the sale and disposition of Federal energy 
using the procedures established by the Secretary pursuant to this Act, 
and, upon approval by the Federal Energy Regulatory Commission, shall 
immediately thereafter apply such rates to each new contract (and to 
each existing contract to the maximum extent permitted by such 
contract) for the sale or disposition of Federal energy by such Federal 
Power Marketing Administration.

SEC. 202. APPROVAL OF FEDERAL ENERGY RATES.

    (a) Flood Control Act of 1944.--(1) The first sentence of section 5 
of the Flood Control Act of 1944 (58 Stat. 890; 16 U.S.C. 825s) is 
amended as follows:
            (A) By inserting the following after the word 
        ``principles:'' ``and the provisions of the Federal Power 
        Marketing Act of 1997''.
            (B) By striking the words ``confirmation and,'' and 
        inserting the following: ``determination or''.
            (C) By striking ``Secretary of Energy'' at the end of such 
        sentence and inserting in lieu thereof ``Federal Energy 
        Regulatory Commission pursuant to the provisions of the Federal 
        Power Marketing Act of 1997''.
    (2) The second sentence of such section 5 is amended by striking 
``(upon the basis of the application of such rate schedules to the 
capacity of the electric facilities of the projects)'' and by striking 
the period at the end thereof and inserting the following: ``and in 
conformance with the provisions of the Federal Power Marketing Act of 
1997.''.
    (b) Department of Energy Organization Act.--Section 302 of the 
Department of Energy Organization Act (42 U.S.C. 7152(a)(1)) is amended 
by adding the following new subsection after subsection (a):
    ``(b) Rates.--The Federal Energy Regulatory Commission shall have 
authority, consistent with the provisions of the Federal Power 
Marketing Act of 1997 to--
            ``(1) approve, reject, or revise rates for the sale and 
        disposition of electric energy by the Federal Power Marketing 
        Administrations; and
            ``(2) determine rates, terms and conditions for the 
        transmission of Federal and non-Federal electric energy by the 
        Federal Power Marketing Administrations.''.
    (c) Pacific Northwest Electric Power Planning and Conservation 
Act.--(1) Section 7(a) of the Pacific Northwest Electric Power Planning 
and Conservation Act (16 U.S.C. 839e(a)(2)) is amended as follows:
            (A) In the first sentence of paragraph (1) by striking 
        ``and for the transmission of non-Federal power'' and in the 
        second sentence of paragraph (1) by striking ``and 
        transmission'' and by striking ``other costs and expenses'' and 
        inserting ``other costs and expenses (other than those properly 
        allocable, as determined by the Federal Energy Regulatory 
        Commission in accordance with generally accepted ratemaking 
        principles)''.
            (B) In paragraph (2) by striking ``confirmation and'' and 
        inserting ``determination or''.
            (C) By amending subparagraph (C) of paragraph (2) to read 
        as follows:
            ``(C) are set in conformance with the Federal Power 
        Marketing Act of 1997.''.
            (D) By inserting the following at the end of subsection 
        (a):
            ``(3) Rates, terms, and conditions for the transmission of 
        power by the Administrator shall be determined by, and shall 
        become effective only as permitted or ordered by, the Federal 
        Energy Regulatory Commission pursuant to the Federal Power 
        Act.''.
    (2) The first sentence of section 7(k) of the Pacific Northwest 
Electric Power Planning and Conservation Act (16 U.S.C. 839e(k)) is 
amended by striking the period and adding the following at the end 
thereof: ``, and in accordance with the Federal Power Marketing Act of 
1997''.
    (3) Section 7(k) of such Act is amended by striking all after 
``approval thereof by the Commission'' and inserting ``in accordance 
with the Federal Power Marketing Act of 1997.''.
    (d) Bonneville Project Act.--Section 7 of the Bonneville Project 
Act, as amended (16 U.S.C. 832(f)), is amended by striking ``(upon the 
basis of the application of such rate schedules to the capacity of the 
electric facilities of Bonneville project)''.
    (e) Federal Columbia River Transmission System Act.--Section 9 of 
the Federal Columbia River Transmission System Act (16 U.S.C. 838g) is 
amended as follows:
            (1) By striking ``confirmation and'' in each place it 
        appears and inserting ``determination or''.
            (2) By striking ``Secretary of Energy'' in each place it 
        appears, and inserting ``Federal Energy Regulatory 
        Commission''.
            (3) By striking ``and'' at the end of paragraph (2).
            (4) By striking the period at the end of the section and 
        adding the following: ``, and (4) in accordance with the 
        provisions of the Federal Power Marketing Act of 1997.''.
    (f) Approval Process.--Notwithstanding any other provision of law, 
the Federal Energy Regulatory Commission shall have authority to 
approve, reject, revise, or determine rates for the sale or disposition 
of electric energy proposed by the Federal Power Marketing 
Administrations. The Commission's authority shall include, but shall 
not be limited to, assuring that rates of the Federal Power Marketing 
Administrations are in accordance with the provisions of this Act. 
Notwithstanding any other provision of law, the Federal Energy 
Regulatory Commission may review de novo the factual bases for rates 
proposed by the Federal Power Marketing Administrations. In any 
proceeding before the Federal Energy Regulatory Commission regarding 
the rates, terms, or conditions for the transmission, sale, or 
disposition of electric energy by a Federal Power Marketing 
Administration, the officers and employees of the Federal Power 
Marketing Administration shall comply with the ex parte rules of the 
Federal Energy Regulatory Commission as applicable to public utilities.
    (g) Rules and Regulations.--The Federal Energy Regulatory 
Commission shall promulgate rules and regulations to implement the 
requirements of this section not later than one year after the date of 
enactment of this Act.

                        TITLE III--TRANSMISSION

SEC. 301. RATES FOR FEDERAL TRANSMISSION SERVICES.

    Section 201(e) of the Federal Power Act (16 U.S.C. 824(e)) is 
amended by inserting ``(1) after ``(e)'', and by adding the following 
new paragraph at the end thereof:
    ``(2) Notwithstanding any other provision of law, each Federal 
Power Marketing Administration, or any corporation or association which 
is wholly owned, directly or indirectly, by any Federal Power Marketing 
Administration shall be considered a public utility solely for the 
purposes of part II and part III of this Act with respect to 
determining, fixing and otherwise regulating rates, terms and 
conditions for transmission of electric energy. The recovery of the 
costs of Federal transmission facilities shall be equitably allocated 
(in accordance with generally accepted ratemaking principles for public 
utilities) to Federal and non-Federal power utilizing such transmission 
facilities. Nothing in this section shall expand the authority of any 
such entities with respect to transmission of electric energy.''.

SEC. 302. AMENDMENT TO SECTION 212 OF THE FEDERAL POWER ACT.

    Section 212 of the Federal Power Act is amended by striking 
subsection (i).

                         TITLE IV--ENFORCEMENT

SEC. 401. REVIEW AND ENFORCEMENT.

    Notwithstanding any other provision of law, each affected person or 
entity shall have the right to bring an action to enforce the 
requirements of this Act and Acts amended by this Act with respect to 
any matter addressed in this Act or by amendment made in this Act in 
the relevant United States district court.
                                 <all>