[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4715 Introduced in House (IH)]

  2d Session
                                H. R. 4715

  To remove Federal impediments to retail competition in the electric 
  power industry, thereby providing opportunities within electricity 
                             restructuring.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 7, 1998

  Mr. Burr of North Carolina introduced the following bill; which was 
                 referred to the Committee on Commerce

_______________________________________________________________________

                                 A BILL


 
  To remove Federal impediments to retail competition in the electric 
  power industry, thereby providing opportunities within electricity 
                             restructuring.

    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 Power Bill''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Competitive retail electricity markets.
Sec. 4. PURPA.
Sec. 5. Public Utility Holding Company Act of 1935.
Sec. 6. Stranded cost.
Sec. 7. Disposition of property.
Sec. 8. Savings clause.
Sec. 9. Study.

SEC. 2. FINDINGS.

    The Congress finds that:
            (1) Many States have moved to retail competition.
            (2) There are Federal barriers to full retail competition.
            (3) The executive branch projects that retail competition 
        will save the American taxpayer $20,000,000,000.
            (4) If Congress acts to remove Federal impediments to 
        retail competition, States will have greater incentive to move 
        to competition and should be encouraged to proceed 
        expeditiously and with due care to rely more on markets and 
        less on regulation to increase the quality and discipline the 
        price of electric service.

SEC. 3. COMPETITIVE RETAIL ELECTRICITY MARKETS.

    (a) Clarification of State Authority To Order Retail Wheeling.--
Subsection (h) of section 212 of the Federal Power Act (16 U.S.C. 
824k(h)) is amended by striking the last sentence and inserting the 
following: ``Nothing in this subsection shall affect any authority of 
any State or local government under State law concerning the 
transmission or sale of electric energy directly to an ultimate 
consumer.''.
    (b) Clarification of State Authority To Impose Conditions Regarding 
Sales of Electricity.--Section 201 of the Federal Power Act is amended 
by adding the following new subsections at the end thereof:
    ``(h) Reciprocity Condition.--
            ``(1) A State may permit an electric utility subject to its 
        jurisdiction to deny access to its transmission and local 
        distribution facilities within the State's borders to any 
        seller of electric energy for the sale of electric energy 
        directly to an ultimate consumer within the State's borders if, 
        as determined by certification to the Commission in a form the 
        Commission shall prescribe within 180 days of the enactment of 
        this paragraph, the predominance of the electric energy sold by 
        that seller directly to ultimate consumers is produced in a 
        State or States that maintain exclusive franchise or market 
        areas for the sale of electric energy directly to ultimate 
        consumers.
            ``(2) Nonregulated utilities.--If, as of the date of the 
        enactment of this paragraph, a State has not established 
        ratemaking authority with respect to an electric utility in the 
        State, the State may not prohibit the utility from selling 
        electric energy at retail in interstate commerce in any other 
        State. Any such utility may sell electric energy at retail in 
        interstate commerce in another State only if the utility 
        provides nondiscriminatory open access (including the 
        functional unbundling of services) to the local distribution 
        facilities of the utility and to any transmission facilities of 
        the utility that are not subject to the jurisdiction of the 
        Federal Energy Regulatory Commission under sections 205 and 206 
        of this Act.
    ``(i) Cooperative Choice.--Notwithstanding any other provision of 
law, cooperatively owned sellers or distributors of electricity shall 
have the right, as consumer-owned cooperatives, to engage in any 
activity or provide any service that is lawfully carried out by any 
other seller or distributor of electricity in that State.
    ``(j) Bypass.--(1) Notwithstanding any provision of this Act or any 
other law, a State or a State regulatory authority (in carrying out its 
authority to regulate facilities used for the local distribution of 
electric energy or for the provision of local distribution service) may 
require, as a condition for the purchase by any person or municipality 
of retail electric energy services, the payment of a charge deemed 
necessary by the State or State regulatory authority for any of the 
following:
            ``(A) To recover costs incurred by an electric utility that 
        become unrecoverable due to the availability of retail electric 
        service choice.
            ``(B) To ensure that adequate electric service is available 
        to all customers served by the retail distribution system 
        concerned.
            ``(C) To ensure and enhance the reliability of retail 
        electric service.
            ``(D) To fund assistance to low-income customers.
            ``(E) To encourage environmental, renewable energy, energy 
        efficiency, conservation programs, or any combination of such 
        programs.
            ``(F) To provide for retraining of electric employees.
            ``(G) To provide payment of all reasonable costs associated 
        with Federal and State requirements regarding the 
        decommissioning of nuclear generating units.
            ``(H) Any combination of the purposes described in 
        subparagraphs (A) through (G).
    ``(2) For purposes of this subsection, the term `local distribution 
service' includes the receipt of electric energy by an end user whether 
or not such receipt requires the use of local distribution 
facilities.''.

SEC. 4. PURPA.

    (a) Findings.--The Congress finds that--
            (1) implementation of section 210 of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) resulted in 
        many consumers paying excessive rates for electricity;
            (2) the Energy Policy Act of 1992 gives nonregulated 
        producers of electricity additional access to the wholesale 
        electric market through transmission access and exemption from 
        the Public Utility Holding Company Act of 1935; and
            (3) in light of the competitive wholesale electric 
        marketplace brought about by the Energy Policy Act of 1992, 
        section 210 of the Public Utility Regulatory Policies Act of 
        1978 need no longer exist.
    (b) Prospective Repeal.--
            (1) New contracts.--After January 1, 1999, no electric 
        utility shall be required to enter into a new contract or 
        obligation to purchase or to sell electric energy or capacity 
        pursuant to section 210 of the Public Utility Regulatory 
        Policies Act of 1978.
            (2) Existing rights and remedies not affected.--Nothing in 
        this section 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 under 
        section 210 of the Public Utility Regulatory Policies Act of 
        1978 pursuant to any contract or obligation to purchase or to 
        sell electric energy or capacity in effect on January 1, 1999, 
        including the right to recover the costs of purchasing such 
        electric energy or capacity.
            (3) Interpretations and actions taken.--Nothing in this Act 
        may be deemed or construed as implying congressional 
        ratification of any interpretation of, or any action taken 
        pursuant to, the Public Utility Regulatory Policies Act of 
        1978.
    (c) Recovery of Costs.--In order to assure recovery by electric 
utilities purchasing electric energy or capacity from a qualifying 
facility pursuant to any legally enforceable obligation entered into or 
imposed pursuant to section 210 of the Public Utility Regulatory 
Policies Act of 1978 prior to January 1, 1999, of all costs associated 
with such purchases, the Commission shall promulgate and enforce such 
regulations as may be required to assure that no utility shall be 
required directly or indirectly to absorb the costs associated with 
such purchases from a qualifying facility. Such regulations shall be 
treated as a rule enforceable under the Federal Power Act (16 U.S.C. 
791a-825r).
    (d) Definitions.--For purposes of this section:
            (1) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (2) The term ``electric utility'' means any person, State 
        agency, or Federal agency, which sells electric energy.
            (3) The term ``qualifying small power production facility'' 
        has the same meaning as provided in section 3(17)(C) of the 
        Federal Power Act.
            (4) The term ``qualifying cogeneration facility'' has the 
        same meaning as provided in section 3(18)(A) of the Federal 
        Power Act.
            (5) The term ``qualifying facility'' means either a small 
        power production facility or a qualifying cogeneration 
        facility.

SEC. 5. PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

    (a) Findings.--The Congress finds that--
            (1) the Public Utility Holding Company Act of 1935 was 
        intended to facilitate the work of Federal and State regulators 
        by placing certain constraints on the activities of holding 
        company systems;
            (2) developments since 1935, including changes in other 
        regulation and in the electric and gas industries, have called 
        into question the continued relevance of the model of 
        regulation established by that Act;
            (3) there is a continuing need for limited Federal and 
        State regulation in order to ensure the rate protection of 
        utility customers; and
            (4) limited Federal regulation is necessary to supplement 
        the work of State commissions for the continued rate protection 
        of electric and gas utility customers.
    (b) Purposes.--The purposes of this section are--
            (1) to eliminate unnecessary regulation, yet continue to 
        provide for consumer protection by facilitating existing rate 
        regulatory authority through improved Federal and State 
        commission access to books and records of all companies in a 
        holding company system, to the extent that such information is 
        relevant to rates paid by utility customers, while affording 
        companies the flexibility required to compete in the energy 
        markets; and
            (2) to address protection of electric and gas utility 
        customers by providing for Federal and State access to books 
        and records of all companies in a holding company system that 
        are relevant to utility rates.
    (c) Definitions.--For purposes of this section:
            (1) The term ``affiliate'' of a company means any company 5 
        percent or more of the outstanding voting securities of which 
        are owned, controlled, or held with power to vote, directly or 
        indirectly, by such company.
            (2) The term ``associate company'' of a company means any 
        company in the same holding company system with such company.
            (3) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (4) The term ``company'' means a corporation, partnership, 
        association, joint stock company, business trust, or any 
        organized group of persons, whether incorporated or not, or a 
        receiver, trustee, or other liquidating agent of any of the 
        foregoing.
            (5) 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.
            (6) The terms ``exempt wholesale generator'' and ``foreign 
        utility company'' have the same meanings as in sections 32 and 
        33, respectively, of the Public Utility Holding Company Act of 
        1935, as those sections existed on the day before the effective 
        date of this Act.
            (7) The term ``gas utility company'' means any company that 
        owns or operates facilities used for distribution at retail 
        (other than the distribution only in enclosed portable 
        containers or distribution to tenants or employees of the 
        company operating such facilities for their own use and not for 
        resale) of natural or manufactured gas for heat, light, or 
        power.
            (8) 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 one or more persons) 
                such a controlling influence over the management or 
                policies of any public utility company or holding 
                company as to make it necessary or appropriate for the 
                rate protection of utility customers with respect to 
                rates that such person be subject to the obligations, 
                duties, and liabilities imposed by this Act upon 
                holding companies.
            (9) The term ``holding company system'' means a holding 
        company, together with its subsidiary companies.
            (10) The term ``jurisdictional rates'' means rates 
        established by the Commission for the transmission of electric 
        energy in interstate commerce, the sale of electric energy at 
        wholesale in interstate commerce, the transportation of natural 
        gas in interstate commerce, and the sale in interstate commerce 
        of natural gas for resale for ultimate public consumption for 
        domestic, commercial, industrial, or any other use.
            (11) The term ``natural gas company'' means a person 
        engaged in the transportation of natural gas in interstate 
        commerce or the sale of such gas in interstate commerce for 
        resale.
            (12) The term ``person'' means an individual or company.
            (13) The term ``public utility'' means any person who owns 
        or operates facilities used for transmission of electric energy 
        in interstate commerce or sales of electric energy at wholesale 
        in interstate commerce.
            (14) The term ``public utility company'' means an electric 
        utility company or a gas utility company.
            (15) 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 laws of such State, has jurisdiction to 
        regulate public utility companies.
            (16) 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 for the rate protection of utility 
                customers with respect to rates that such person be 
                subject to the obligations, duties, and liabilities 
                imposed by this Act upon subsidiary companies of 
                holding companies.
            (17) 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.
    (d) Repeal of the Public Utility Holding Company Act of 1935.--The 
Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et seq.) is 
repealed, effective 18 months after the date of enactment of this Act.
    (e) Federal Access to Books and Records.--
            (1) In general.--Each holding company and each associate 
        company thereof shall maintain, and shall make available to the 
        Commission, such books, accounts, memoranda, and other records 
        as the Commission deems to be relevant to costs incurred by a 
        public utility or natural gas company that is an associate 
        company of such holding company and necessary or appropriate 
        for the protection of utility customers with respect to 
        jurisdictional rates for the transmission of electric energy in 
        interstate commerce, the sale of electric energy at wholesale 
        in interstate commerce, the transportation of natural gas in 
interstate commerce, and the sale in interstate commerce of natural gas 
for resale for ultimate public consumption for domestic, commercial, 
industrial, or any other use.
            (2) Affiliate companies.--Each affiliate of a holding 
        company or of any subsidiary company of a holding company shall 
        maintain, and make available to the Commission, such books, 
        accounts, memoranda, and other records with respect to any 
        transaction with another affiliate, as the Commission deems to 
        be relevant to costs incurred by a public utility or natural 
        gas company that is an associate company of such holding 
        company and necessary or appropriate for the protection of 
        utility customers with respect to jurisdictional rates.
            (3) Holding company systems.--The Commission may examine 
        the books, accounts, memoranda, and other records of any 
        company in a holding company system, or any affiliate thereof, 
        as the Commission deems to be relevant to costs incurred by a 
        public utility or natural gas company within such holding 
        company system and necessary or appropriate for the protection 
        of utility customers with respect to jurisdictional rates.
            (4) Confidentiality.--No member, officer, or employee of 
        the Commission shall divulge any fact or information that may 
        come to his or her knowledge during the course of examination 
        of books, accounts, memoranda, or other records as provided in 
        this section, except as may be directed by the commission or by 
        a court of competent jurisdiction.
    (f) State Access to Books and Records.--
            (1) In general.--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, the holding 
        company or any associate company or affiliate thereof, other 
        than such public utility company, wherever located, shall 
        produce for inspection books, accounts, memoranda, and other 
        records that--
                    (A) have been identified in reasonable detail in a 
                proceeding before the State commission;
                    (B) the State commission deems are relevant to 
                costs incurred by such public utility company; and
                    (C) are necessary for the effective discharge of 
                the responsibilities of the State commission with 
                respect to such proceeding.
            (2) Limitation.--Paragraph (1) shall not apply to any 
        person that is a holding company solely by reason of ownership 
        of 1 or more qualifying facilities under the Public Utility 
        Regulatory Policies Act.
            (3) Confidentiality of information.--The production of 
        books, accounts, memoranda, and other records under paragraph 
        (1) shall be 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.
            (4) Effect on state law.--Nothing in this section shall 
        preempt applicable State law concerning the provision of books, 
        records, or any other information, or in any way limit the 
        rights of any State to obtain books, records, or any other 
        information under any other Federal law, contract, or 
        otherwise.
            (5) Court jurisdiction.--Any United States district court 
        located in the State in which the State commission referred to 
        in paragraph (1) is located shall have jurisdiction to enforce 
        compliance with this section.
    (g) Exemption Authority.--
            (1) Rulemaking.--Not later than 90 days after the date of 
        enactment of this Act, the Commission shall promulgate a final 
        rule to exempt from the requirements of subsection (e) any 
        person that is a holding company, solely with respect to 1 or 
        more--
                    (A) qualifying facilities under the Public Utility 
                Regulatory Policies Act of 1978;
                    (B) exempt wholesale generators; or
                    (C) foreign utility companies.
            (2) 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 or natural gas 
        company, or if the Commission finds that any class of 
        transaction is not relevant to the jurisdictional rates of a 
        public utility or natural gas company, the Commission shall 
        exempt such person or transaction from the requirements of 
        subsection (e).
    (h) Affiliate Transactions.--Nothing in this section shall preclude 
the Commission or a State commission from exercising its jurisdiction 
under otherwise applicable law to determine whether a public utility 
company, public utility, or natural gas 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.
    (i) Applicability.--No provision of this section 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 entity 
        referred to in paragraph (1), (2), or (3); or
            (5) any officer, agent, or employee of any entity referred 
        to in paragraph (1), (2), or (3) acting as such in the course 
        of his or her official duty.
    (j) Effect on Other Regulations.--Nothing in this section precludes 
the Commission or a State commission from exercising its jurisdiction 
under otherwise applicable law to protect utility customers.
    (k) Enforcement.--The Commission shall have the same powers as set 
forth in sections 306 through 317 of the Federal Power Act (16 U.S.C. 
825d-825p) to enforce the provisions of this section.
    (l) Savings Provisions.--
            (1) In general.--Nothing in this section prohibits a person 
        from engaging in or continuing to engage in activities or 
        transactions in which it is legally engaged or authorized to 
        engage on the effective date of this Act, if that person 
        continues to comply with the terms of any such authorization, 
        whether by rule or by order.
            (2) Effect on other commission authority.--Nothing in this 
        section limits the authority of the Commission under the 
        Federal Power Act (16 U.S.C. 791a et seq.) (including section 
        301 of that Act) or the Natural Gas Act (15 U.S.C. 717 et seq.) 
        (including section 8 of that Act).
    (m) Implementation.--Not later than 18 months after the date of 
enactment of this Act, the Commission shall--
            (1) promulgate such regulations as may be necessary or 
        appropriate to implement this section (other than subsection 
        (f)); and
            (2) submit to the Congress detailed recommendations on 
        technical and conforming amendments to Federal law necessary to 
        carry out this section and the amendments made by this section.
    (n) Transfer of Resources.--All books and records that relate 
primarily to the functions transferred to the Commission under this 
section shall be transferred from the Securities and Exchange 
Commission to the Commission.
    (o) Effective Date.--This section shall take effect 18 months after 
the date of enactment of this Act.
    (p) Authorization of Appropriations.--There are authorized to be 
appropriated such funds as may be necessary to carry out this section.
    (q) Conforming Amendment to the Federal Power Act.--Section 318 of 
the Federal Power Act (16 U.S.C. 825q) is repealed.

SEC. 6. STRANDED COST.

    As a condition of recieving Federal energy assistance, each State 
that has by law or regulation adopted provisions to provide for the 
recovery of stranded costs as defined by State law or regulation shall 
file all such provisions with the Federal Energy Regulatory Commission 
and shall not change, amend, modify or repeal such provisions for 7 
years after the date of filing with the Commission. The Commission 
shall determine by rule the scope of Federal energy assistance covered 
by this section, taking care to encourage to the fullest extent 
stability concerning the recovery of stranded costs. The Commission 
also shall compile and make available to the public all such provisions 
and may require any State, as a further condition of recieving energy 
assistance, to prepare and file an explanation of the provision that it 
has placed on file.

SEC. 7. DISPOSITION OF PROPERTY.

    Section 203 of the Federal Power Act is repealed.

SEC. 8. SAVINGS CLAUSE.

    Nothing in this Act shall be construed to prohibit any State from 
dealing with public welfare issues.

SEC. 9. STUDY.

    The Secretary of Energy shall report to Congress within 2 years 
after the enactment of this Act on the extent to which actions taken by 
the States have removed regulatory and statutory barriers to interstate 
commerce in electricity. The report shall describe any remaining 
barriers to interstate commerce and shall make recommendations to the 
Congress for additional action that may be necessary to lower and/or 
eliminate barriers to interstate commerce in electricity consistent 
with the development of a fully competitive marketplace.
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