[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 237 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 237

 To provide for retail competition among electric energy suppliers for 
    the benefit and protection of consumers, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 30, 1997

  Mr. Bumpers introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL


 
 To provide for retail competition among electric energy suppliers for 
    the benefit and protection of consumers, 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 
Protection Act of 1997''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Severability.
                      TITLE I--RETAIL COMPETITION

Sec. 101. Definitions.
Sec. 102. Mandatory retail access.
Sec. 103. Aggregation.
Sec. 104. Prior implementation.
Sec. 105. State regulation.
Sec. 106. Stranded cost recovery.
Sec. 107. Multistate utility company stranded costs.
Sec. 108. Universal service.
Sec. 109. Public benefits.
Sec. 110. Renewable energy.
Sec. 111. Transmission.
Sec. 112. Cross-subsidization.
Sec. 113. Competitive generation markets.
Sec. 114. Nuclear decommissioning costs.
Sec. 115. Tennessee Valley Authority.
Sec. 116. Enforcement.
               TITLE II--PUBLIC UTILITY HOLDING COMPANIES

Sec. 201. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 202. Definitions.
Sec. 203. Exemptions.
Sec. 204. Federal access to books and records.
Sec. 205. State access to books and records.
Sec. 206. Affiliate transactions.
Sec. 207. Clarification of regulatory authority.
Sec. 208. Effect on other regulation.
Sec. 209. Enforcement.
Sec. 210. Savings provision.
Sec. 211. Implementation.
Sec. 212. Resources.
           TITLE III--PUBLIC UTILITY REGULATORY POLICIES ACT

Sec. 301. Definition.
Sec. 302. Facilities.
Sec. 303. Contracts.
Sec. 304. Savings clause.
Sec. 305. Effective date.
                   TITLE IV--ENVIRONMENTAL PROTECTION

Sec. 401. Study.

SEC. 2. FINDINGS.

    The Congress finds that:
            (a) Congress has the authority to enact laws, under the 
        Commerce Clause of the United States Constitution, regarding 
        the wholesale and retail generation, transmission, 
        distribution, and sale of electric energy in interstate 
        commerce.
            (b) It is in the public interest that consumers receive 
        reliable and inexpensive electric service and competition among 
        electric suppliers can produce these benefits.
            (c) Electric utility companies that prudently incurred 
        costs pursuant to a regulatory structure that required them to 
        provide electricity to consumers should not be penalized during 
        the transition to competition.
            (d) Consumers will not benefit from the introduction of 
        competition among electric suppliers if certain suppliers have 
        undue market power.
            (e) It is important to encourage conservation and the use 
        of renewable resources to reduce reliance on fossil fuels and 
        to promote domestic energy security.
            (f) The transition to electric competition should not 
        degrade reliability nor cause consumers to lose electric 
        service.

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--RETAIL COMPETITION

SEC. 101. DEFINITIONS.

    For purposes of this title:
            (1) The term ``affiliate'' shall have the same meaning 
        given the term in section 202(10) of this Act.
            (2) The term ``aggregator'' means any person that purchases 
        or acquires retail electric energy on behalf of two or more 
        consumers.
            (3) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (4) The term ``consumer'' means a person who purchases 
        retail electric energy.
            (5) The term ``corporation'' means any corporation, joint-
        stock company, partnership, association, cooperative, municipal 
        utility, business trust, organized group of persons, whether 
        incorporated or not, or a receiver or receivers, trustee or 
        trustees of any of the foregoing.
            (6) The term ``large hydroelectric facility'' means a 
        facility which has a power production capacity, which together 
        with any other facilities located at the same site is greater 
        than 80 megawatts.
            (7) The terms ``local distribution facilities'' and 
        ``retail transmission facilities'' mean facilities used to 
        provide retail electric energy to consumers.
            (8) The term ``mitigation'' means any widely accepted 
        business practice used by a retail electric energy provider to 
        dispose of or reduce uneconomic assets or costs.
            (9) The term ``person'' means an individual or corporation.
            (10) The term ``public utility holding company'' shall have 
        the same meaning given the term in section 202(6) of this Act.
            (11) The term ``renewable energy'' means electricity 
        generated from solar, wind, waste, except for municipal solid 
        waste, biomass, hydroelectric or geothermal resources.
            (12) 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.
            (13) The term ``retail electric competition'' means the 
        ability of each consumer in a particular State to purchase 
        retail electric energy from any person seeking to sell electric 
        energy to such consumer.
            (14) The term ``retail electric energy'' means electric 
        energy and ancillary services sold for ultimate consumption.
            (15) The term ``retail electric energy provider'' means any 
        person who distributes retail electric energy to consumers 
        regardless of whether the consumers purchase such energy from 
        the provider or another supplier.
            (16) The term ``retail electric energy supplier'' means any 
        person which sells retail electric energy to consumers.
            (17) The term ``State'' means any State or the District of 
        Columbia.
            (18) The term ``State regulatory authority'' means any 
        State agency, including a municipality, which has ratemaking 
        authority with respect to the rates of any retail electric 
        energy provider and the Tennessee Valley Authority.
            (19) The term ``transmission system'' means all facilities, 
        including federally-owned facilities, transmitting electricity 
        in interstate commerce in a particular region, including those 
        located in the State of Texas and those providing international 
        interconnections, but does not include local distribution and 
        retail transmission facilities as defined by the Commission.
            (20) The term ``wholesale electric energy'' means electric 
        energy and related services sold for resale.
            (21) The term ``wholesale electric energy supplier'' means 
        any person which sells wholesale electric energy.

SEC. 102. MANDATORY RETAIL ACCESS.

    (a) Customer Choice.--Beginning on December 15, 2003 each consumer 
shall have the right to purchase retail electric energy from any 
person, subject to any limitations imposed pursuant to section 105(a) 
of this Act, offering to sell retail electric energy to such consumer.
    (b) Local Distribution and Retail Transmission Facilities.--
Beginning on December 15, 2003 all persons seeking to sell retail 
electric energy shall have reasonable and nondiscriminatory access, on 
an unbundled basis, to the local distribution and retail transmission 
facilities of all retail electric energy providers and all related 
services.

SEC. 103. AGGREGATION.

    Subject to any limitations imposed pursuant to section 105(a) of 
this Act, a group of consumers or any person acting on behalf of such 
group may purchase or acquire retail electric energy for the members of 
the group if they are located in a State or States where there is 
retail electric competition.

SEC. 104. PRIOR IMPLEMENTATION.

    (a) State Action.--A State or State regulatory authority, if 
authorized under State law, may require retail electric energy 
providers selling retail electric energy to consumers in such State to 
provide reasonable and nondiscriminatory access, on an unbundled basis, 
to its local distribution and retail transmission facilities and all 
related services to competing retail electric energy suppliers prior to 
December 15, 2003.
    (b) Nonregulated Providers.--A retail electric energy provider not 
subject to the jurisdiction of a State regulatory authority may elect 
to provide reasonable and nondiscriminatory access, on an unbundled 
basis, to its local distribution and retail transmission facilities and 
all related services to competing retail electric energy suppliers 
prior to December 15, 2003.
    (c) Grandfather.--Legislation enacted by a State or a regulation 
issued by a State regulatory authority prior to January 30, 1997 which 
has the effect of requiring retail electric competition on or before 
December 15, 2003, shall be deemed to be in compliance with the 
requirements of sections 102, 106 and 107 of this Act, for so long as 
such retail electric competition exists.

SEC. 105. STATE REGULATION.

    (a) State Requirements.--Nothing in this Act shall prohibit a State 
or a State regulatory authority from imposing requirements on persons 
seeking to sell retail electric energy to consumers in that State which 
are intended to promote the public interest, including requirements 
related to reliability and the provision of information to consumers 
and other retail electric suppliers. Any such requirements must be 
applied on a nondiscriminatory basis and may not be used to exclude any 
class of potential suppliers, such as retail electric energy providers, 
from the opportunity to sell retail electric energy.
    (b) Maintenance of State Authority.--Nothing in this Act is 
intended to prohibit a State from enacting laws or imposing regulations 
related to retail electric energy service that are consistent with the 
requirements of this Act.
    (c) Continued State Authority Over Distribution.--A State or State 
regulatory authority may continue to regulate local distribution and 
retail transmission service currently subject to State regulation in 
any manner consistent with this Act.

SEC. 106. STRANDED COST RECOVERY.

    (a) Application for Recovery.--A retail electric energy provider 
that was subject to the jurisdiction of a State regulatory authority 
prior to the date of enactment of this Act may submit an application to 
the State regulatory authority seeking calculation of its total 
stranded costs in that State if:
            (1) subsequent to January 30, 1997, the State regulatory 
        authority has issued a regulation or the State has enacted 
        legislation requiring retail electric competition which does 
        not provide for the full recovery of stranded costs; or
            (2) the retail electric energy provider's customers have 
        access to retail competition as a result of the requirements of 
        section 102 of this Act.
    (b) Calculation of Stranded Costs.--
            (1) If a State regulatory authority calculates the 
        applicant's stranded costs pursuant to subsection (a), the 
        authority shall choose, within six months after the receipt of 
        the application, between the calculation methodologies 
        described in subsection (f) of this section.
            (2) If a State regulatory authority does not calculate the 
        retail electric energy provider's total stranded costs, the 
        Commission shall calculate the provider's stranded costs using 
        the methodology described in subsection (f)(2) of this section.
    (c) Nonregulated Utilities.--A retail electric energy provider that 
is not subject to regulation by a State regulatory authority prior to 
the date of enactment of this Act may calculate the amount of its total 
stranded costs pursuant to either methodology described in subsection 
(f) of this section.
    (d) Right of Recovery.--A retail electric energy provider shall be 
entitled to full recovery of its stranded costs, over a reasonable 
period of time, through a non-bypassable Stranded Cost Recovery Charge 
imposed on its distribution and retail transmission customers.
    (e) Prohibition on Cost-Shifting.--No class of consumers in a State 
shall be assessed a Stranded Cost Recovery Charge that a State 
regulatory authority or the Commission, whichever is applicable, 
determines is in excess of the class' proportional responsibility for 
the retail electric energy provider's costs that existed prior to the 
implementation of retail electric competition in such State.
    (f) Calculation of Stranded Costs.--For purposes of this section 
and section 107 of this Act, the term ``stranded costs'' means either 
(1) all legitimate, prudently incurred and verifiable investments made 
by a retail electric energy provider in generation assets, including 
binding power purchase contracts, and related regulatory assets which 
would have been recoverable but for the implementation of retail 
electric competition following the date of enactment of this Act, and 
which cannot be reasonably mitigated or (2) if a retail electric energy 
provider sells all of its generating facilities, the difference between 
the book value of such facilities less the amount received from their 
sale. Nothing in this title is intended to permit a reassessment of 
prudence with regard to the incurrence of costs related to a particular 
generating facility or contract in the event a State Regulatory 
Authority or the Commission has already made a legally binding 
determination.

SEC. 107. MULTISTATE UTILITY COMPANY STRANDED COSTS.

    (a) Limitation on Obligation.--Customers of a retail electric 
energy provider that serves customers in more than one State or that is 
affiliated with another retail electric energy provider shall only be 
responsible for stranded costs associated with retail electric 
competition in the State or area in which such customers are located.
    (b) Regional Generating Facilities.--
            (1) The consent of Congress is given for the creation of a 
        regional board if--
                    (A) each State regulatory authority regulating an 
                affiliate of a public utility holding company with 
                affiliate retail electric energy providers serving 
                customers in more than one state elects to join such a 
                board;
                    (B) an affiliate of the public utility holding 
                company owns and/or operates a generating facility and 
                sells power from that facility to two or more 
                affiliates of the same holding company and did not sell 
                retail electric energy prior to January 30, 1997 
                (hereinafter referred to as the ``wholesale generating 
                company); and
                    (C) the public utility holding company notifies 
                each State regulatory authority which regulates a 
                retail electric energy provider affiliated with the 
                holding company that it intends to seek recovery of the 
                stranded costs associated with the generating facility 
                or facilities (described in subsection (b)(1)(B)) owned 
                by the wholesale generating company affiliated with 
                such holding company.
            (2) The regional board shall be formed if each State 
        regulatory authority elects to create the board within six 
        months after receiving the notification described in subsection 
        (b)(1)(C). If such elections are not made within the requisite 
        time period, the Commission shall assume the responsibilities 
        of the board as described in this section.
            (3) The regional board shall have one year after the date 
        it is formed to calculate, on a unanimous basis, the stranded 
        costs associated with the generating facility which is the 
        subject of the proceeding in accordance with the definition 
        contained in section 106(f) of this Act and to allocate such 
        costs among the retail electric energy provider affiliates of 
        the public utility holding company on a just and reasonable and 
        nondiscriminatory basis.
            (4) If the regional board fails to make either or both 
        determinations, as described in subsection (b)(3) in the 
        requisite time period, the Commission shall make the 
        determination or determinations that have yet to be made.
            (5) After its level of stranded costs is determined 
        pursuant to this subsection, the wholesale generating company 
        affiliate of the holding company shall be entitled to fully 
        recover its stranded costs, over a reasonable period of time, 
        from the retail electric energy provider affiliates to which it 
        sells electric energy pursuant to the procedures established by 
        this subsection.
            (6) A retail electric energy provider's stranded cost 
        payment obligations pursuant to this subsection shall be deemed 
        stranded costs for the purposes of sections 106 and 107 of this 
        Act.

SEC. 108. UNIVERSAL SERVICE.

    (a) Service Obligation.--After December 15, 2003, each retail 
electric energy provider shall be obligated to sell retail electric 
energy to, or purchase retail electric energy on behalf of, any 
consumer in a particular State served by such retail electric energy 
provider if the State regulatory authority located in such State has 
determined that such consumer does not have reasonable access to 
competing retail electric energy suppliers and the consumer has not 
chosen an alternative supplier.
    (b) Compensation.--
            (1) If the retail electric energy provider performing the 
        service described in subsection (a) is subject to State 
        regulatory authority regulation of its distribution services, 
        such provider shall be compensated at a just and reasonable 
        rate established by such regulatory authority.
            (2) If the retail electric energy provider performing the 
        service described in subsection (a) is not subject to 
        distribution service regulation by a State regulatory 
        authority, such provider shall establish the appropriate level 
        of compensation.
            (3) A State or a State regulatory authority, if authorized 
        by the State, may impose a nonbypassable Universal Service 
        Charge imposed on the distribution and retail transmission 
        customers of all retail electric energy providers in such State 
        to fund all or part of the compensation provided in subsections 
        (b)(1) and (b)(2).
            (4) A State regulatory authority or the retail electric 
        energy provider, if it establishes its own level of 
        compensation pursuant to subsection (b)(2), may require the 
        consumer receiving retail electric energy pursuant to 
        subsection (a) to pay for all or part of the compensation 
        provided in subsections (b)(1) and (b)(2).

SEC. 109. PUBLIC BENEFITS.

    Nothing in this Act shall prohibit a State or State regulatory 
authority from assessing charges on consumers to fund public benefit 
programs such as those designed to aid low-income energy consumers, 
promote energy research and development or achieve energy efficiency 
and conservation.

SEC. 110. RENEWABLE ENERGY.

    (a) Minimum Renewable Requirement.--Beginning on January 1, 2004 
and each year thereafter, every retail electric energy supplier shall 
submit to the Commission Renewable Energy Credits in an amount equal to 
the required annual percentage of the total retail electric energy sold 
by such supplier in the preceding calendar year.
    (b) State Renewable Energy Programs.--Nothing in this section shall 
be construed to prohibit any State or any State regulatory authority 
from requiring additional renewable energy generation in that State 
under any program adopted by the State.
    (c) Required Annual Percentage.--Beginning in calendar year 2003, 
the required annual percentage for each retail electric energy supplier 
shall be 5 percent. Thereafter, the required annual percentage for each 
such supplier shall be 9 percent beginning in calendar year 2008 and 12 
percent beginning in calendar year 2013.
    (d) Submission of Credits.--A retail electric energy supplier 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 sold by such supplier in such 
        calendar year.
            (2) Renewable Energy Credits issued by the Commission under 
        this section to any other retail electric energy supplier for 
        renewable energy sold in such calendar year by such other 
        supplier and acquired by such retail electric energy supplier.
            (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.
    (e) Issuance of Renewable Energy Credits.--
            (1) The Commission shall establish by rule after notice and 
        opportunity for hearing but not later than one year after the 
        date of enactment of this Act, a National Renewable Energy 
        Trading Program to issue Renewable Energy Credits to retail 
        electric suppliers. Renewable Energy Credits shall be 
        identified by type of generation and the State in which the 
        facility is located. Under such program, the Commission shall 
        issue--
                    (A) one-half of one Renewable Energy Credit to any 
                retail electric energy supplier who sells one unit of 
                renewable energy generated at a large hydroelectric 
                facility;
                    (B) one Renewable Energy Credit to any retail 
                electric energy supplier who sells one unit of 
                renewable energy generated at a facility, other than a 
                large hydroelectric facility, built prior to the date 
                of enactment of this Act; and
                    (C) two Renewable Energy Credits to any retail 
                electric supplier who sells one unit of renewable 
                energy generated at a facility, other than a large 
                hydroelectric facility, built on or after the date of 
                enactment of this Act.
            (2) 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 such Credits.
    (f) Sale or Exchange.--Renewable Energy Credits may be sold or 
exchanged by the person issued or the person who acquires the Credit. A 
Renewable Energy Credit for any year that is not used to satisfy the 
minimum renewable sales requirement of this section for that year may 
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.
    (g) Rules and Regulation.--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 
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 
measure 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 
on December 31, 2019.

SEC. 111. TRANSMISSION.

    (a) Transmission Regions.--Within two years after the date of 
enactment of this Act, the Commission shall establish the broadest 
feasible transmission regions and designate an Independent System 
Operator to manage and operate the transmission system in each region 
beginning on December 15, 2003. In establishing transmission regions 
and designating Independent System Operators the Commission shall give 
deference to Independent System Operators approved by the Commission 
prior to the date of enactment of this Act, if it would be consistent 
with the requirements of this section.
    (b) Independent System Operators.--A person designated as an 
Independent System Operator shall not be subject to the control of--
            (1) any person owning any transmission facilities located 
        in the region in which the Independent System Operator will 
        operate; or
            (2) any retail electric energy supplier selling retail 
        electric energy to consumers in the region in which the 
        Independent System Operator will operate.
    (c) Regional Transmission Oversight Board.--After the Commission 
has designated an Independent System Operator for a particular 
transmission region, each State that is part of the transmission region 
established by the Commission may elect to join a Regional Transmission 
Oversight Board. If all States within the transmission region so elect 
within 180 days after the Commission designates an Independent System 
Operator for the transmission region, the Board shall be formed.
    (d) Board Membership.--The Regional Transmission Oversight Board 
shall be composed of an equal number of members from each State which 
is a member of the Board. The Board shall prescribe its own rules for 
organization, practice and procedure for carrying out the functions 
assigned by this section.
    (e) Transmission Regulation.--
            (1) If a Regional Transmission Oversight Board is formed, 
        it shall have the same authority as the Commission has pursuant 
        to Sections 205, 206, 211, and 212 of the Federal Power Act (16 
        U.S.C. 824d, 824e, 824j, and 824k), as amended by this Act, 
        with respect to the transmission of electric energy in 
        interstate commerce by the Independent System Operator within 
        the transmission region designated by the Commission. Any 
        actions taken by such Board pursuant to this subsection shall 
        be consistent with Commission precedent.
            (2) If a Regional Transmission Oversight Board is not 
        formed for a particular region, the Commission shall continue 
        to have authority over the transmission of electric energy in 
        interstate commerce by the Independent System Operator within 
        the transmission region designated by the Commission.
            (3) The Commission shall have authority over the 
        transmission of electric energy in interstate commerce between 
        two or more transmission regions designated by the Commission.
            (4) Section 212(f) of the Federal Power Act (16 U.S.C. 
        824k(f) shall be repealed on the date the Tennessee Valley 
        Authority becomes a retail electric energy supplier.
            (5) Section 212(g) of the Federal Power Act (16 U.S.C. 
        824k(g) is amended by adding ``prior to December 15, 2003'' 
        immediately following ``utilities''.
            (6) The prohibition outlined by Section 212(h) of the 
        Federal Power Act (16 U.S.C. 824k(h)) shall be inapplicable 
        either--
                    (A) in any situation where a retail electric energy 
                supplier is seeking access to a transmission facility 
                for the purpose of selling retail electric energy to a 
                consumer located in a State that has authorized retail 
                electric competition prior to December 15, 2003; or
                    (B) in all cases beginning on December 15, 2003.
    (f) Rules.--On or before January 1, 2002, the Commission shall 
issue binding rules for it and the various Regional Transmission 
Boards, governing oversight of the Independent System Operators, 
designed to promote transmission reliability and efficiency and 
competition among retail and wholesale electric energy suppliers, 
including rules related to transmission rates that inhibit competition 
and efficiency.

SEC. 112. CROSS-SUBSIDIZATION.

    Nothing in this Act is intended to permit retail electric energy 
providers from recovering in its distribution and retail transmission 
rates any costs associated with unregulated activities.

SEC. 113. COMPETITIVE GENERATION MARKETS.

    (a) Mergers.--
            (1) Section 203(a) of the Federal Power Act (16 U.S.C. 
        824b(a)) is amended by adding ``including the promotion of 
        competitive wholesale and retail electric generation markets,'' 
        immediately following ``public interest''.
            (2) Add the following new subsections at the end of Section 
        203 of the Federal Power Act (16 U.S.C. 824b):
    ``(c) Acquisition of Natural Gas Utility Company.--No public 
utility shall acquire the facilities or securities of a natural gas 
utility company unless the Commission finds that such acquisition is in 
the public interest.
    ``(d) Definition.--For purposes of this section, the term ``natural 
gas utility company'' means any company that owns or operates 
facilities used for the transmission at wholesale, or the distribution 
at retail (other than the distribution only in enclosed portable 
containers) of natural or manufactured gas for heat, light, or 
power.''.
    (b) Market Power.--The Commission shall take such actions as it 
determines are necessary to prohibit any retail electric energy 
supplier or retail electric energy provider or any affiliate thereof, 
from using its ownership or control of resources to maintain a 
situation inconsistent with effective competition among retail and 
wholesale electric suppliers.

SEC. 114. NUCLEAR DECOMMISSIONING COSTS.

    To ensure safety with regard to the public health and safe 
decommissioning of nuclear generating units, retail and wholesale 
electric energy suppliers and retail electric energy providers owning 
nuclear generating units prior to the date of enactment of this Act 
shall be entitled and obligated to recover, from their customers, all 
reasonable costs associated with Federal and State requirements for the 
decommissioning of such nuclear generating units.

SEC. 115. TENNESSEE VALLEY AUTHORITY.

    (a) Competition in Service Territory.--Notwithstanding any other 
provision of law, all retail and wholesale electric energy suppliers 
shall have the right to sell retail and wholesale electric energy to 
consumers that currently purchase retail or wholesale electric energy 
either directly from the Tennessee Valley Authority or persons 
purchasing electric energy from the Tennessee Valley Authority, 
beginning on December 15, 2003 or, if the Tennessee Valley Authority, 
in its capacity as a State regulatory authority, chooses an earlier 
date, such earlier date.
    (b) Ability To Sell Electric Energy.--Notwithstanding any other 
provision of law, the Tennessee Valley Authority shall be able to sell 
retail electric energy and wholesale electric energy to any person, 
subject to any State restrictions imposed pursuant to section 105 of 
this Act, beginning on the date retail electric competition in the 
Authority's service territory, as described in subsection (a), becomes 
effective.
    (c) Protection of United States Treasury.--This section shall be 
inapplicable if the Secretary of Energy, in consultation with the 
Office of Management and Budget, determines that the application of 
this section is contrary to the financial interest of the United 
States.

SEC. 116. ENFORCEMENT.

    (a) Violation of the Act.--If any individual or corporation or any 
other retail electric energy supplier or provider fails to comply with 
the requirements of this Act, any aggrieved person may bring an action 
against such entity to enforce the requirements of this Act in the 
appropriate Federal district court.
    (b) State or Commission Action.--Notwithstanding any other 
provision of law, any person seeking redress from an action taken by a 
State Regulatory Authority, the Commission or a regulatory board 
pursuant to this Act shall bring such action in the appropriate circuit 
of the United States Court of Appeals.

               TITLE II--PUBLIC UTILITY HOLDING COMPANIES

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

    The Public Utility Holding Company Act of 1935, as amended, 15 
U.S.C. 79 et seq., is hereby repealed, effective one year from the date 
of enactment of this Act.

SEC. 202. DEFINITIONS.

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

SEC. 203. EXEMPTIONS.

    (a) Federal and State Agencies.--No provision of this title shall 
apply to: (1) the United States, (2) a State or any political 
subdivision of a State, (3) any foreign governmental authority not 
operating in the United States, (4) any agency, authority, or 
instrumentality of any of the foregoing, or (5) any officer, agent, or 
employee of any of the foregoing acting as such in the course of his 
official duty.
    (b) Unnecessary Provisions.--The Commission, by rule or order, may 
conditionally or unconditionally exempt any person or transaction, or 
any class or classes of persons or transactions, from any provision or 
provisions of this title or of any rule or regulation thereunder, if 
the Commission finds that regulation of such person or transaction is 
not relevant to the rates of a public utility company. The Commission 
shall not grant such an exemption, except with regard to section 204 of 
this Act, unless all affected State commissions consent.
    (c) Retail Competition.--The provisions of this title shall not 
apply to a holding company and every associate company of such holding 
company if the Commission certifies that the retail customers of every 
public utility subsidiary of such holding company have access to 
alternative sources of electricity in a manner that no longer requires 
regulation of the holding company for the protection of consumers.

SEC. 204. FEDERAL ACCESS TO BOOKS AND RECORDS.

    (a) Provision of Books and Records.--Every holding company and 
associate company thereof shall maintain, and make available to the 
Commission, such books, records, accounts, and other documents as the 
Commission deems relevant to costs incurred by a public utility company 
that is an associate company of such holding company and necessary or 
appropriate for the protection of consumers with respect to rates.
    (b) Examination of Books and Records.--The Commission may examine 
the books and 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 company within such holding company system 
and necessary or appropriate for the protection of consumers with 
respect to rates.
    (c) Protected Information.---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, or other 
information as hereinbefore provided, except insofar as he may be 
directed by the Commission or by a court.

SEC. 205. STATE ACCESS TO BOOKS AND RECORDS.

    (a) Provision of Books and Records.--Every holding company and 
associate company thereof, shall maintain, and make available to each 
State Commission regulating the rates of any public utility subsidiary 
of such holding company, such books, records, accounts, and other 
documents as the State Commission deems relevant to costs incurred by a 
public utility company that is an associate company of such holding 
company and necessary or appropriate for the protection of consumers 
with respect to rates.
    (b) Protected Information.--No member, officer, or employee of a 
State Commission shall divulge any fact or information that may come to 
his knowledge during the course of examination of books, accounts, or 
other information as hereinbefore provided, except insofar as he may be 
directed by the State Commission or a court.

SEC. 206. AFFILIATE TRANSACTIONS.

     (a) Interaffiliate Transactions.--Both the Commission, with regard 
to wholesale rates, and State Commissions, with regard to retail rates, 
shall have the authority to determine whether a public utility company 
may recover in rates any costs of goods and services acquired by such 
public utility company from an associate company after July 1, 1994, 
regardless of when the contract for the acquisition of such goods and 
services was entered into.
    (b) Associate Companies.--Both the Commission, with regard to 
wholesale rates, and State Commissions, with regard to retail rates, 
shall have the authority to determine whether a public utility company 
may recover in rates any costs associated with an activity performed by 
an associate company.
    (c) Interaffiliate Power Transactions.--
            (1) Each State Commission shall have the authority to 
        examine the prudence of a wholesale electric power purchase 
        made by a public utility, which is not an associate company of 
        a public utility holding company, providing retail electric 
        service subject to regulation by the State Commission.
            (2) Each State Commission shall have the authority to 
        examine the prudence of a wholesale electric power purchase 
        made by a public utility, which is an associate company of a 
        public utility holding company, providing retail electric 
        service subject to regulation by the State Commission, provided 
        that the costs related to such purchase have not been allocated 
        among two or more associated companies of such public utility 
        holding company, by the Commission prior to the date of 
        enactment and there is no subsequent reallocation after the 
        date of enactment.

SEC. 207. CLARIFICATION OF REGULATORY AUTHORITY.

    No public utility which is an associate company of a holding 
company may recover in rates from wholesale or retail customers any 
costs not associated with the provision of electric service to such 
customers, including those direct and indirect costs related to 
investments not associated with the provision of electric service to 
those customers, unless the Commission, with regard to wholesale rates, 
or a State Commission, with regard to retail rates, explicitly 
consents.

SEC. 208. EFFECT ON OTHER REGULATION.

    Nothing in this Act shall preclude a State Commission from 
exercising its jurisdiction under otherwise application 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. 825d-825p) to 
enforce the provisions of this Act.

SEC. 210. SAVINGS PROVISION.

    Nothing in this title prohibits a person from engaging in 
activities in which it is legally engaged or authorized to engage on 
the date of enactment of this title provided that it continues to 
comply with the terms of any authorization, whether by rule or by 
order.

SEC. 211. IMPLEMENTATION.

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

SEC. 212. RESOURCES.

    All books and records that relate primarily to the function hereby 
vested in the Commission shall be transferred from the Securities and 
Exchange Commission to the Commission.

           TITLE III--PUBLIC UTILITY REGULATORY POLICIES ACT

SEC. 301. DEFINITION.

    For purposes of this title, the term ``facility'' means a facility 
for the generation of electric energy or an addition to or expansion of 
the generating capacity of such a facility.

SEC. 302. FACILITIES.

    Section 210 of the Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 824a-3) shall not apply to any facility which begins 
commercial operation after the effective date of this title, except a 
facility for which a power purchase contract entered into under such 
section was in effect on such effective date.

SEC. 303. CONTRACTS.

    After the effective date of this title or after the date on which 
retail electric competition, as defined in title I of this Act, is 
implemented in all of its service territories, whichever is earlier, no 
public utility shall be required to enter into a new contract or 
obligation to purchase or sell electric energy pursuant to section 210 
of the Public Utility Regulatory Policies Act of 1978.

SEC. 304. SAVINGS CLAUSE.

    Notwithstanding sections 302 and 303, nothing in this title shall 
be construed:
            (a) As granting authority to the Commission, a State 
        regulatory authority, electric utility, or electric consumer, 
        to reopen, force, the renegotiation of, or interfere with the 
        enforcement of power purchase contracts or arrangements in 
        effect on the effective date of this Act between a qualifying 
        small power producer and any electric utility or electric 
        consumer, or any qualifying cogenerator and any electric 
        utility or electric consumer.
            (b) To affect the rights and remedies of any party with 
        respect to such a power purchase contract or arrangement, or 
        any requirement in effect on the effective date of this Act to 
        purchase or to sell electric energy from or to a qualifying 
        small power production facility or qualifying cogeneration 
        facility.

SEC. 305. EFFECTIVE DATE.

    This title shall take effect on December 15, 2003.

                   TITLE IV--ENVIRONMENTAL PROTECTION

SEC. 401. STUDY.

    The Environmental Protection Agency, in consultation with other 
relevant federal agencies, shall prepare and submit a report to 
Congress by January 1, 2000, which examines the implications of 
differences in applicable air pollution emissions standards for 
wholesale and retail electric generation competition and for public 
health and the environment. The report shall recommend changes to 
federal law, if any are necessary, to protect public health and the 
environment.
                                 <all>