[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2734 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2734

To allow local government entities to serve as nonprofit aggregators of 
           electricity services on behalf of their citizens.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 5, 1999

Mr. Brown of Ohio (for himself, Mr. Delahunt, Ms. McCarthy of Missouri, 
    Mr. Kucinich, Ms. Kaptur, Mrs. Jones of Ohio, and Mr. Tierney) 
 introduced the following bill; which was referred to the Committee on 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
To allow local government entities to serve as nonprofit aggregators of 
           electricity services on behalf of their citizens.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Community Choice for Electricity Act 
of 1999''.

SEC. 2. DEFINITIONS.

    As used in this Act:
            (1) The term ``aggregation'' means the purchase or 
        acquisition of retail electricity on behalf of two or more 
        consumers.
            (2) The term ``electric utility franchise'' means rights 
        granted to a utility company by a local government which 
        provide conditions under which the utility conducts its 
        operations and services within the boundaries of the local 
        government.
            (3) The term ``municipal electric utility'' means a city, 
        county, irrigation district, drainage district, public utility 
        district, or other political subdivision or agency of a State 
        competent under the laws thereof to carry on the business of a 
        retail electricity distributor and/or a retail electricity 
        supplier.
            (4) The term ``opt-out aggregation plan'' means aggregation 
        in which all customers within the jurisdiction of a local 
        government unit are automatically included unless they 
        affirmatively choose a supplier other than the supplier 
        designated by the local government unit.
            (5) The term ``retail electric consumer'' means any person 
        who purchases or offers to purchase any retail electric supply.
            (6) The term ``rural electric cooperative'' means an 
        enterprise or organization owned by and operated for the 
        benefit of those receiving retail electricity (usually 
        distribution and supply) and other services from the 
        cooperative.
            (7) The term ``State'' means a State, the District of 
        Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, 
        Guam, American Samoa, the Commonwealth of the Northern Mariana 
        Islands, and Indian tribes as defined in section 102(2) of the 
        Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 
        479a(2)).
            (8) The term ``State regulatory authority'' means any State 
        agency which has ratemaking authority with respect to the 
        provision of local electric energy distribution services by any 
        local distribution company.
            (9) The term ``supplier'' means any person who produces, 
        generates, manufactures, aggregates, markets, brokers, sells, 
        or otherwise supplies electric energy.

SEC. 3. FINDINGS.

    Congress finds the following:
            (1) Many States are deregulating retail sales of 
        electricity.
            (2) Deregulation of retail sales of electricity must 
        benefit all customers, including residential and small business 
        customers.
            (3) In States that have deregulated retail sales of 
        electricity, large industrial and commercial customers are 
        winning the best deals, and few choices are yet available to 
        residential and small business consumers.
            (4) It is likely that most residential customers will not 
        actively choose a new electricity supplier and instead will 
        remain customers of their current electricity supplier for 
        years to come;
            (5) All customers, especially residential and small 
        business customers, will often find it difficult and 
        frustrating to find the time and sufficient information to 
        fully evaluate competing offers from electricity suppliers.
            (6) Aggregation into larger buying groups will enable 
        consumers to achieve greater leverage and thus better prices 
        and services in electricity markets.
            (7) Community choice is a particular type of aggregation in 
        which a local government negotiates a contract for electric 
        energy on behalf of all citizens within its boundaries. 
        Residents or businesses in the community who prefer to choose 
their own electricity suppliers would be free to ``opt out''.
            (8) All consumers taking part in community choice 
        aggregation can benefit, including large customers, who can 
        still receive price differentiation based on their larger 
        usage.
            (9) Local governments are experienced in working with 
        technical consultants to negotiate contracts and deliver 
        services to their citizens.
            (10) Local governments are accountable to their 
        constituents through elections, open meetings laws, fair 
        bidding laws, and conflict of interest laws.
            (11) Because local governments exercising community choice 
        must include all electricity customers within the jurisdiction 
        who want to participate, all citizens and businesses who so 
        choose can benefit, while other types of retail electricity 
        suppliers will seek to serve the more profitable customers or 
        specific types of customers.
            (12) Local governments can provide an electric load that 
        has diversity and may be attractive to electricity suppliers.
            (13) In States that have deregulated retail sales of 
        electricity, citizens should be able to use traditional public 
        processes to determine whether their local governments should 
        act as nonprofit aggregators for their communities.
            (14) In States in which they hold franchise powers for 
        electricity, local governments should be able to use their 
        franchise to exercise community choice.

SEC. 4. AGGREGATION.

    Notwithstanding any other provision of Federal or State law, and 
subject to legitimate and nondiscriminatory State requirements imposed 
on retail electric suppliers, a group of customers or any entity, 
including a unit of State or local government, acting on behalf of such 
group may acquire retail electric energy on an aggregate basis if the 
group of customers is served by one or more local distribution 
companies that are subject to retail competition.

SEC. 5. COMMUNITY CHOICE AGGREGATION.

    Title VI of the Public Utility Regulatory Policies Act of 1978 is 
amended by adding the following new section at the end thereof:

``SEC. 609. COMMUNITY CHOICE AGGREGATION.

    ``(a) Community Choice Aggregation of Electric Load.--Any State 
that permits any group of retail electric consumers to choose among 
competing suppliers of electric energy shall permit any general purpose 
local government unit for any political subdivision of the State, or 
group of such general purpose units of local government acting 
together, to offer to act as an agent for all purchasers that are 
within such group of retail electric consumers and that are located 
within the boundaries of such political subdivision for the purpose of 
purchasing electric energy on an aggregate basis if such local 
government, or group of local governments, comply with the requirements 
of subsection (b).
    ``(b) Requirements.--
            ``(1) Approval by vote.--A local government shall be 
        covered by the provisions of subsection (a) only if such 
        government has approved the aggregation of electric energy 
        purchases by a vote of its elected governing body or by a vote 
        of its citizens. Two or more local governments shall be covered 
        by the provisions of subsection (a) only if such governments 
        have approved the aggregation of electric energy purchases by a 
        vote of the elected governing body or by a vote of the citizens 
        of each local government.
            ``(2) Participation not mandatory.--A local government 
        shall be covered by the provisions of subsection (a) only if 
        all retail electric consumers permitted to choose among 
        competing suppliers of electric energy that are located within 
        the boundaries of such political subdivision are offered the 
        opportunity to participate in the aggregation of purchases and 
        any such consumer choosing not to participate is permitted to 
        opt out and purchase electric energy from another agent acting 
        as an aggregator or directly from any supplier or other person.
            ``(3) State regulatory authorities.--Each State regulatory 
        authority for a State that permits any group of retail electric 
        consumers to choose among competing suppliers of electric 
        energy shall cooperate with local governments for the purpose 
        of compliance with this subsection. Each such State regulatory 
        authority shall establish guidelines for local governments 
        acting as community choice electricity aggregators. No State 
        regulatory authority may interfere with a local government's 
        existing powers to procure competitive energy services under 
        existing Federal and State law, city charter provisions, or 
        local procurement practices.
            ``(4) Funds for renewable energy or energy efficiency.--
        Each State that permits any group of retail electric consumers 
        to choose among competing suppliers and that also authorizes or 
        mandates the collection of funds for renewable energy or energy 
        efficiency programs shall permit local governments that serve 
as community choice aggregators of electric energy purchases to collect 
and expend such funds in the case of consumers within the aggregated 
jurisdiction if the local government has prepared and approved a plan 
for such collection and expenditure at the local level and State 
regulators have reviewed and approved said plan as consistent with 
State energy goals and as providing an appropriate contribution to any 
statewide or regional renewable energy or energy efficiency fund that 
benefits the aggregated jurisdiction.
    ``(c) Federal Power Act Jurisdiction.--No local government that 
aggregates electric load as described in subsection (a) shall be 
considered a utility engaging in the wholesale purchase and resale of 
electricity for purposes of the Federal Power Act. Providing 
electricity to aggregated customers within the boundaries of a local 
government as described in subsection (a) shall not be considered a 
wholesale transaction subject to the jurisdiction of the Federal Energy 
Regulatory Commission under the Federal Power Act.
    ``(d) Enforcement.--The Federal Energy Regulatory Commission may 
bring an action in the appropriate United States District Court against 
any State to require compliance with the provisions of subsection (a).
    ``(e) Savings Provision.--Nothing in this section shall be 
construed to prohibit the aggregation of electric load by local 
government units in a different manner under other authority of law.''.

SEC. 6. FRANCHISES.

    Any State that has deregulated retail sales of electricity shall 
permit local governments to exercise local franchise powers. A local 
government that has granted a franchise to a utility at a prior time 
may offer such franchise for competitive bidding and contract award, 
provided such measures are authorized by consumers in a public process.

SEC. 7. EXCLUSIONS.

    (a) Utilities Not Participating.--For municipal electric utilities 
and rural electric cooperatives that are not participating in retail 
electric competition, sections 4, 5, and 6 of this Act shall not apply.
    (b) Aggregation.--For States that have adopted retail competition 
by law or regulation prior to the date of enactment of this Act, 
sections 4, 5, and 6 of this Act shall not apply to the provisions of a 
State law or regulation, and any subsequent regulation implementing 
such State law or regulation as such law or regulation may pertain to 
an opt-out aggregation plan as it may be undertaken by any general 
purpose local government unit for any political subdivision of the 
State including a municipal corporation, county government or township.

SEC. 8. SEPARABILITY.

    If any provision of this Act (or the application of that provision 
to particular persons or circumstances) is held invalid, the remainder 
of this Act (or the application of that provision to other persons or 
circumstances) shall not be affected.
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