[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 655 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 655

 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

                           February 10, 1997

 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 1997''.
    (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. Prior State adoption.
Sec. 108. Antitrust laws.
Sec. 109. FERC authority for transmission.
Sec. 110. Effect on other authorities.
Sec. 111. Barriers to entry.
Sec. 112. Illegal changes in customer selections.
Sec. 113. Renewable energy.
Sec. 114. Jurisdictional determinations of transmission and local 
                            distribution facilities.
          TITLE II--PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

Sec. 201. Applicability of title; relationship to Public Utility 
                            Holding Company Act of 1935.
Sec. 202. Definitions.
Sec. 203. Federal access to books and records.
Sec. 204. Exemption authority regarding Federal access.
Sec. 205. State access to books and records.
Sec. 206. Affiliate transactions.
Sec. 207. Application of title.
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 of 1978, as provided by 
        section 3 of that Act.
            (3) The term ``retail electric energy service'' 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, tidal, 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 the Commission within 6 months after 
the enactment of this Act. 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 Act. Any State that 
established retail electric service choice for retail customers of 
State regulated electric utilities in such State before the enactment 
of this Act may submit a notice under this section within 6 months 
after the enactment of this Act.
    (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 State regulated electric utilities 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 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) Services that are not competitive may not be used to 
        subsidize services that are subject to competition.
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 retail customers of a State regulated 
electric utility subject to the jurisdiction of such State regulatory 
authority shall implement, on the effective date of retail electric 
service choice for such customers, appropriate flexible pricing 
procedures and incentive-based rate regulation for each retail electric 
energy service provided by such 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 retail customers of any State regulated 
electric utility shall, on the effective date of such establishment, 
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) Consideration of Certain Terms and Conditions.--Each State 
regulatory authority that makes an election to establish retail 
electric service choice for retail customers of a State regulated 
electric utility 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 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 State regulated 
        electric utility subject to the ratemaking jurisdiction of such 
        State regulatory authority to recover costs incurred prior to 
        July 11, 1996, and any costs incurred pursuant to a contract 
        entered into under section 210 of the Public Utility Regulatory 
        Policies Act of 1978.
            (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, by no later than December 15, 2000, retail 
electric service choice for its customers. Such election shall be made 
through submission, within 6 months after the enactment of this 
section, of a notice to the State regulatory authority exercising 
ratemaking jurisdiction over State regulated utilities in the State in 
which such nonregulated utility is located. Such notice shall be 
submitted to the Commission in the case of a State without a State 
regulatory authority exercising ratemaking jurisdiction over State 
regulated electric utilities. If, within such 6-month period, the 
utility notifies the State regulatory authority (or the Commission in 
the case of a State without a State regulatory authority exercising 
ratemaking jurisdiction over State regulated electric utilities) 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. Any nonregulated electric utility that 
established retail electric service choice for its retail customers 
before the enactment of this Act may submit a notice under this section 
within 6 months after the enactment of this Act.
    (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) Services that are not competitive may not be used to 
        subsidize services that are subject to competition.
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) 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 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 costs incurred prior to July 11, 1996 and 
        any costs incurred pursuant to a contract entered into under 
        section 210 of the Public Utility Regulatory Policies Act of 
        1978.
            (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.
    (d) 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 of the United States Code, 
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, 107, or 111 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, 107, and 111. 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 a notice under section 103(a) or 104(a) is not 
submitted by the date applicable under section 103(a) or 104(a) for a 
State regulated or a nonregulated electric utility, the Commission 
shall implement by December 15, 2000, subsections (b) through (e) of 
section 103 and subsections (b) through (d) of section 104 for that 
State or nonregulated electric utility. The exercise of such 
authorities pursuant to this section shall preempt any State law that 
is inconsistent with the exercise of such authorities.
    (b) 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. PRIOR STATE ADOPTION.

    (a) Prior Adoption of Customer Choice.--Nothing in this title shall 
be construed to prohibit any State or State regulatory authority or any 
nonregulated electric utility from establishing or enforcing any 
statute, rule, or regulation relating to retail electric service 
competition prior to December 15, 2000, or to require any State or 
State regulatory authority or nonregulated electric utility to 
establish or enforce any statute, rule or regulation relating to retail 
electric service competition prior to December 15, 2000.
    (b) Preservation of Prior Customer Choice.--
            (1) State regulated electric utilities.--For any State that 
        established retail electric service choice for State regulated 
        electric utilities before the enactment of this Act, nothing in 
        this title shall be construed to preempt any State statute, 
        rule, or regulation relating to retail electric service choice 
        to the extent that such statute, rule, or regulation satisfies 
        the requirements of subsections (b) through (e) of section 103.
            (2) Nonregulated electric utilities.--For any nonregulated 
        electric utility that established retail electric service 
        choice for its customers before the enactment of this Act, 
        nothing in this title shall be construed to preempt any State 
        or local statute, rule, or regulation relating to retail 
        electric service choice for such customers to the extent that 
        such statute, rule, or regulation satisfies the requirements of 
        subsections (b) through (d) of section 104.

SEC. 108. 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. 109. 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. 110. 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. 111. BARRIERS TO ENTRY.

    (a) Nondiscriminatory Access.--After the effective date for retail 
electric service choice (as determined under section 103 or 104) for a 
State regulated or nonregulated 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 
electric energy service or from providing any retail electric energy 
service directly or indirectly to any such customer.
    (b) State and Local Regulatory Authority.--A State or local 
government may, under State law, impose requirements relating to retail 
electric energy services necessary to ensure that adequate electric 
service is available to all customers served by the retail distribution 
system concerned, protect public safety and welfare, ensure the 
continued quality of electric services and safeguard the rights of 
consumers to 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. 112. 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 retail 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 retail 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. 113. RENEWABLE ENERGY.

    (a) Minimum Renewable Generation Requirement.--For calendar years 
after December 31, 2000, each electric generator 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. In determining the total electric energy generated by 
any electric generator, electric energy generated by means of 
hydroelectric facilities shall not be taken into account. 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 calendar year 2001 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 that sell 
        electric energy to any other person. 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 and sells 
        to any other person 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 a State regulated 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. 114. JURISDICTIONAL DETERMINATIONS OF TRANSMISSION AND LOCAL 
              DISTRIBUTION FACILITIES.

    (a) In General.--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.''
    (b) Bypass.--(1) Notwithstanding the Federal Power Act, 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) Any combination of the purposes described in 
        subparagraphs (A) through (F). Notwithstanding the Federal 
Power Act, a nonregulated electric utility may also require, as a 
condition for the purchase by any person of retail electric energy 
services, the payment of a charge deemed necessary by the nonregulated 
electric utility for any of such purposes.
    (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.

          TITLE II--PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

SEC. 201. APPLICABILITY OF TITLE; RELATIONSHIP TO PUBLIC UTILITY 
              HOLDING COMPANY ACT OF 1935.

    (a) Applicability of Title.--
            (1) In general.--This section and section 202 take effect 
        on the date of the enactment of this Act.
            (2) Company-specific applicability of other provisions.--
        Section 203 and the subsequent sections of this title take 
        effect for a holding company, and for each public utility 
        company of the holding company, on the date on which, pursuant 
        to subsection (b), the Public Utility Holding Company Act of 
        1935 ceases to apply to the holding company and to each public 
        utility company of the holding company.
    (b) Applicability of Public Utility Holding Company Act of 1935; 
Company-Specific Determinations by States.--The Public Utility Holding 
Company Act of 1935 ceases to apply to a holding company, and to each 
public utility company of the holding company, on the date on which all 
of the following conditions are met:
            (1) In the case of each electric utility company of the 
        holding company, each State in which such utility company 
        provides electric energy at retail makes a determination that 
        the retail customers of the utility company in such State are 
        able to purchase electric energy at retail from any person 
        offering electric energy to the purchaser on a competitively 
        neutral and nondiscriminatory basis.
            (2) In the case of each gas utility company of the holding 
        company, each State in which such utility company distributes 
        at retail natural or manufactured gas or both (as the case may 
        be) for heat, light, or power makes a determination that the 
        retail customers of the utility company in such State are able 
        to purchase such gas at retail from any person offering such 
        gas to the purchaser on a competitively neutral and 
        nondiscriminatory basis.
            (3) Each State making a determination under paragraph (1) 
        or (2) notifies the Commission, and the Securities and Exchange 
        Commission, of such determination.

SEC. 202. DEFINITIONS.

    For purposes of this title:
            (1) 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.
            (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, a 
        partnership, an association, a joint-stock company, a business 
        trust, or an organized group of persons, whether incorporated 
        or not; or any receiver, trustee, or other liquidating agent of 
        any of the foregoing in his capacity as such.
            (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.
            (7) 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.
            (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 1 or more other 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 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.
            (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 sale 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 law 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 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.
            (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.

SEC. 203. 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, accounts, documents, and other records as the 
Commission deems 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 consumers 
with respect to jurisdictional 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, accounts, documents, and other 
records with respect to any transaction that is subject to this title, 
as the Commission deems 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 consumers 
with respect to jurisdictional rates.
    (c) Authority To Examine.--The Commission may examine the books, 
accounts, documents, and other records of any company in a holding 
company system, or any affiliate thereof, as the Commission deems 
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 consumers with respect to jurisdictional rates.
    (d) Confidentiality.--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, accounts, 
documents, and other records as provided in this section, except 
insofar as he may be directed by the Commission or by a court of 
competent jurisdiction.

SEC. 204. EXEMPTION AUTHORITY REGARDING FEDERAL ACCESS.

    (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 203 any person that is a holding company, 
solely with respect to one or more--
            (1) qualifying facilities under the Public Utility 
        Regulatory Policies Act of 1978;
            (2) exempt wholesale generators; or
            (3) foreign utility companies.
    (b) Other Authority.--If, upon application or upon its own motion, 
the Commission finds that the books, accounts, documents, and other 
records of any person are not relevant to the jurisdictional rates of a 
public utility or a natural gas company, or if the Commission finds 
that any class of transactions is not relevant to the jurisdictional 
rates of a public utility or a natural gas company, the Commission 
shall exempt such person or transaction from the requirements of 
section 203.

SEC. 205. 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, accounts, 
documents, and other records that--
            (1) have been identified in reasonable detail in a 
        proceeding before the State commission;
            (2) the State commission deems are relevant to costs 
        incurred by such public utility company; and
            (3) are necessary for the effective discharge of the 
        responsibilities of the State commission with respect to such 
        proceeding.
    (b) Savings.--Nothing in this section shall preempt applicable 
State law concerning the provision of books, accounts, documents, and 
other records, or in any way limit the rights of a State to obtain 
books, accounts, documents, and other records under Federal law, 
contracts, or otherwise.
    (c) Court Jurisdiction.--Any district court of the United States 
located in the State in which the State commission referred to in 
subsection (a) is located shall have jurisdiction to enforce compliance 
with this section.

SEC. 206. AFFILIATE TRANSACTIONS.

    Nothing in this title 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. 207. 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 entity 
        referred to in paragraph (1), (2), or (3), or of any 
        corporation that is wholly owned, directly or indirectly by 1 
        or more of such entities; or
            (5) any officer, agent, or employee of any entity referred 
        to in paragraph (1), (2), (3), or (4) acting as such in the 
        course of his official duty.

SEC. 208. EFFECT ON OTHER REGULATION.

    Nothing in this title shall preclude the Commission or 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 
306 through 317 of the Federal Power Act (16 U.S.C. 825e-825p) to 
enforce the provisions of this title.

SEC. 210. SAVING PROVISIONS.

    (a) In General.--Nothing in this title 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 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 such authorization, whether by rule or by order.
    (b) Effect on Other Commission Authority.--Nothing in this title 
limits the authority of the Commission under the Federal Power Act 
(including section 301 of that Act) or the Natural Gas Act (including 
section 8 of that Act).

SEC. 211. IMPLEMENTATION.

    Not later than 18 months after the date of the enactment of this 
Act, the Commission shall--
            (1) promulgate such regulations as may be necessary or 
        appropriate to implement this title; and
            (2) submit to the Congress detailed recommendations on 
        technical and conforming amendments to Federal law necessary to 
        carry out this title and the amendments made by this title.

SEC. 212. TRANSFERS.

    All books, accounts, documents, and other records that relate 
primarily to the functions hereby vested in the Commission under this 
title 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 cease to apply 
        to an electric utility if the State makes a determination that 
        the retail customers of such utility in such State are able to 
        purchase electric energy at retail from any person offering 
        electric energy to the purchaser on a competitively neutral and 
        nondiscriminatory basis and if the State notifies the 
        Commission of such determination.
            ``(2) Rights and remedies not affected.--Nothing in the 
        Electric Consumers' Power to Choose Act of 1997 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.''.
                                 <all>