[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4655 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 4655

 To direct the Secretary of Energy to sell the fossil-fuel and nuclear 
generation facilities and the electric power transmission facilities of 
        the Tennessee Valley Authority, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 14, 2000

 Mr. Frelinghuysen (for himself, Mr. Franks of New Jersey, Mr. Foley, 
 and Mr. Meehan) introduced the following bill; which was referred to 
the Committee on Transportation and Infrastructure, and in addition to 
 the Committee on Commerce, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To direct the Secretary of Energy to sell the fossil-fuel and nuclear 
generation facilities and the electric power transmission facilities of 
        the Tennessee Valley Authority, 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.

    This Act may be cited as the ``Tennessee Valley Authority Power 
Competition Act of 2000''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1) current consumers of electricity generated by the 
        Tennessee Valley Authority would benefit from the lower costs, 
        reduced pollution, and increased efficiencies associated with 
        competition;
            (2) the United States has encouraged other countries to 
        privatize their government-owned power facilities; and
            (3) with the emergence of competitive power markets in the 
        United States, the Federal Government should ensure that its 
        own utilities do not enjoy artificial competitive advantages.
    (b) Purposes.--The purposes of this Act are--
            (1) to bring the benefits of competition to the consumers 
        of Tennessee Valley Authority power;
            (2) direct the Secretary of Energy to sell, using a 
        competitive bidding procedure, certain federally owned 
        generation and transmission facilities of the Tennessee Valley 
        Authority; and
            (3) ensure that power from the Tennessee Valley Authority's 
        hydroelectric dams is sold at market rates.

SEC. 3. SALE OF FOSSIL-FUEL AND NUCLEAR GENERATION AND ELECTRIC 
              TRANSMISSION FACILITIES.

    (a) Sale of Facilities.--In accordance with this Act, the Secretary 
of Energy (in this Act referred to as the ``Secretary'') shall sell the 
fossil-fuel and nuclear power generation and electric power 
transmission facilities owned and operated by the Tennessee Valley 
Authority.
    (b) Competitive Bidding.--
            (1) In general.--In order to ensure that the facilities are 
        transferred in a manner that provides a reasonable payment to 
        the United States, the Secretary shall conduct sales under this 
        section using a competitive bidding process open to all 
        bidders--
                    (A) that the Secretary considers to be financially 
                qualified and to have the experience and resources 
                necessary to manage the transferred facilities; and
                    (B) that are entities incorporated or organized in 
                the United States or United States citizens who reside 
                principally within the United States.
            (2) Minimum bid.--
                    (A) In general.--No facility may be sold under this 
                section for an amount less than the minimum bid, as 
                determined by the Secretary in accordance with 
                subparagraph (B).
                    (B) Calculation of amount.--The minimum bid for any 
                facility sold under this section shall be equal to the 
                net present value of the outstanding debt attributable 
                to the facility.
    (c) Cooperation of Other Agencies.--The Tennessee Valley Authority 
and heads of other affected Federal departments and agencies shall 
assist the Secretary in implementing the sale of facilities under this 
section.
    (d) Financial and Bid Management Advisor.--
            (1) Retention of advisor.--
                    (A) In general.--Not later than 180 days after the 
                date of enactment of this Act, the Secretary shall 
                retain an experienced private sector firm to serve as 
                financial, bid management, and technical advisor 
                (referred to in this Act as the ``Advisor'') with 
                respect to sales under this section.
                    (B) Financial interest.--The Advisor may not have 
                any substantial financial interest in--
                            (i) the facilities to be sold under this 
                        section;
                            (ii) the operation of such facilities; or
                            (iii) the purchasers of such facilities.
            (2) Notice.--Not later than 180 days after the date of 
        enactment of this Act, the Secretary shall publish a notice in 
        the Federal Register soliciting all parties that have an 
        operational or ownership interest in facilities to be sold 
        under this section to provide evidence of such interest not 
        later than 90 days after publication of the notice.
            (3) Advisor's report.--Not later than 180 days after being 
        retained by the Secretary, based on information provided by the 
        Tennessee Valley Authority and the Secretary and the 
        information obtained under paragraph (2), the Advisor shall 
        submit to the Secretary a report containing each of the 
        following:
                    (A) A plan for the competitive sale of all 
                facilities described in subsection (a).
                    (B) An estimate of the net present value of the 
                revenue expected to be derived from each such facility 
                during the 50-year period beginning on the date of the 
                report.
                    (C) An estimate of the net present value of the 
                expenses expected to be incurred in connection with 
                each such facility during the 50-year period beginning 
                on the date of the report.
                    (D) An analysis of the relationships among the 
                estimate described in subparagraph (B), the estimate 
                described in subparagraph (C), and the net present 
                value of the outstanding debt attributable to each such 
                facility.
                    (E) An analysis of options for grouping facilities 
                for sale under this section so as to realize the 
                greatest return to the United States.
            (4) Structure of sales.--The plan submitted under paragraph 
        (3)(A) shall provide for--
                    (A) the sale of facilities in a manner that ensures 
                that the United States receives a reasonable payment 
                for each sale; and
                    (B) subject to subparagraph (A), the sale of 
                facilities by project, unless the Advisor provides 
                satisfactory information to the Secretary that an 
                alternative structure is in the interests of the United 
                States.
    (e) Costs of Sales.--
            (1) In general.--The Secretary may use not more than 
        $15,000,000 from unobligated balances available to the 
        Department of Energy for the costs of preparing for and 
        conducting the sale of facilities under this section.
            (2) Report to congress.--Not later than 60 days after the 
        completion of the sale of all facilities under this section, 
        the Secretary shall transmit to the Committee on Transportation 
        and Infrastructure of the House of Representatives, and to the 
        Committee on Environment and Public Works of the Senate, an 
        accounting of all costs described in paragraph (1) and any 
        studies prepared by the Secretary related to such costs.
    (f) Proceeds of Sales.--
            (1) In general.--The proceeds of any sale of facilities 
        under this section shall be applied by the Secretary as 
        follows:
                    (A) First, to offset the costs of carrying out the 
                sale.
                    (B) Second, to pay the outstanding debt 
                attributable to such facilities.
            (2) Remaining funds.--Any proceeds remaining after the 
        payment of costs under paragraph (1) shall be deposited in the 
        Treasury of the United States as miscellaneous receipts.
    (g) Treatment of Sales for Purposes of Certain Laws.--The sale of 
facilities under this Act shall not be considered a disposal of Federal 
surplus property under the following provisions of law:
            (1) Section 203 of the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 484).
            (2) Section 13 of the Surplus Property Act of 1944 (50 
        U.S.C. App. 1622).
    (h) Contracts, Obligations, and Lawsuits.--
            (1) In general.--Each sale under this section shall be 
        subject to all contracts, debt obligations to non-Federal 
        entities, operational objectives, and other binding agreements 
        that apply, as of the date of such sale, to the facilities sold 
        and to the sale of electric power from such facilities.
            (2) Assumption.--The purchasers of facilities sold under 
        this section shall assume all liabilities and obligations of 
        the Tennessee Valley Authority under the contracts, 
        obligations, or other agreements described in paragraph (1).
            (3) New contracts and obligations.--After the date of 
        enactment of this Act, the Tennessee Valley Authority may not, 
        with respect to any facility to be sold under this section, 
        enter into any long-term agreement, contract, or other long-
        term obligation or responsibility, unless such agreement, 
        contract, obligation, or responsibility enhances or maintains 
        the value of such facility.
            (4) Lawsuits.--
                    (A) In general.--After the sale of any facility 
                under this section, the Tennessee Valley Authority 
                shall retain the responsibility for concluding any 
                lawsuits associated with the facility, whether acting 
                as a plaintiff or a defendant.
                    (B) Transfer of certain rights, titles, and 
                interests.--Any right, title, or interest held by the 
                United States at the conclusion of a lawsuit described 
                in subparagraph (A) and which, but for the lawsuit, 
                would have been transferred as part of a sale of a 
                facility under this section, shall be transferred to 
                the party in interest who purchased the facility.
    (i) Report to Federal Energy Regulatory Commission.--Not later than 
180 days after the date of enactment of this Act, the Secretary shall 
provide to the Federal Energy Regulatory Commission each of the 
following:
            (1) A description of--
                    (A) each of the assets, tangible or intangible, 
                that comprise each facility to be sold under this 
                section;
                    (B) the existing terms of operation with respect to 
                each such facility; and
                    (C) any other interest being proposed for sale.
            (2) The information related to such facilities required by 
        subparts B, F, and G (other than exhibit E of subpart G) of 
        title 18, Code of Federal Regulations.
            (3) Information regarding the date on which an offer for 
        purchase of such facilities must be submitted.
    (j) Notice of Sale and Solicitation of Bids.--Not later than 1 year 
after the date of the enactment of this Act, the Secretary shall 
publish a notice in the Federal Register that includes each of the 
following:
            (1) A description of--
                    (A) each of the assets, tangible and intangible, 
                that comprise each facility to be sold under this 
                section;
                    (B) the existing terms of operation with respect to 
                each such facility; and
                    (C) any other interest being proposed for sale.
            (2) Information regarding the date, time, and conditions 
        for the submission of bids for facilities sold under this 
        section.
    (k) Completion of Sales.--The Secretary shall complete all sales 
under this section not later than 180 days after the publication of 
notice under subsection (j).
    (l) Employees.--As a condition of the purchase of each facility 
under this section, the Secretary shall require each purchaser to 
provide assurances that the purchaser will, consistent with good 
business practices, attempt to offer employment to those former 
employees of the United States who are necessary to the continued 
operation of the facility.
    (m) Federal Energy Regulatory Commission Jurisdiction.--All rates 
and charges established for the wholesale sale of electric power from 
facilities sold under this section shall be subject to part 2 of the 
Federal Power Act.

SEC. 4. MARKET-BASED RATES FOR HYDROELECTRIC POWER.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary shall develop and implement procedures to 
ensure that all power produced by hydroelectric dams owned by the 
Tennessee Valley Authority is sold at prices that reflect the demand 
for and the supply of such power in the relevant bulk power supply 
market.
    (b) Bid and Auction Procedures.--The Secretary shall establish by 
regulation bid and auction procedures to implement subsection (a) with 
respect to hydroelectric power sold under any power sale contract 
entered into by the Tennessee Valley Authority after the date that is 1 
year after the date of enactment of this Act, including remarketed 
power that has been declined by a party entitled to purchase it.
    (c) Use of Revenue.--
            (1) In general.--
                    (A) Offset of costs.--Out of revenue collected 
                under procedures described in subsection (b), the 
                Secretary shall remit to the Secretary of the Treasury 
                amounts (as determined by the Secretary with the 
                approval of the Federal Energy Regulatory Commission) 
                to cover the costs of--
                            (i) all power-related operations and 
                        maintenance expenses associated with the 
                        Tennessee Valley Authority's hydroelectric 
                        facilities;
                            (ii) compliance with all legal obligations 
                        (including treaty obligations) with respect to 
                        fish and wildlife; and
                            (iii) project investments related to power 
                        production, including repayment of the U.S. 
                        Treasury for appropriated investments.
                    (B) Remaining revenue.--Any revenue collected under 
                procedures described in subsection (b) that is not 
                remitted under subparagraph (A) shall be remitted to 
                the Secretary of the Treasury for the following uses:
                            (i) 50 percent of such revenue shall be 
                        used for the reduction of the Federal debt.
                            (ii) 35 percent of such revenue shall be 
                        deposited in the fund established under 
                        paragraph (2)(A).
                            (iii) 15 percent of such revenue shall be 
                        deposited in the fund established under 
                        paragraph (3)(A).
            (2) Fund for environmental mitigation and restoration.--
                    (A) Establishment.--
                            (i) In general.--There is established in 
                        the Treasury of the United States a fund to be 
                        known as the Fund for Environmental Mitigation 
                        and Restoration (referred to in this paragraph 
                        as the ``Fund''), consisting of funds deposited 
                        under paragraph (1)(B)(ii).
                            (ii) Administration.--The Fund shall be 
                        administered by a Board of Directors consisting 
                        of the Secretary, the Administrator of the 
                        Environmental Protection Agency, and the 
                        Secretary of the Army, or their designees.
                    (B) Use.--Amounts in the Fund shall be available--
                            (i) to carry out projects described in 
                        subparagraph (C); and
                            (ii) to cover all costs incurred in 
                        establishing and administering the Fund.
                    (C) Project-specific plans.--
                            (i) In general.--For each hydroelectric 
                        project that is used to generate power marketed 
                        by the Tennessee Valley Authority, the Board of 
                        Directors of the Fund shall develop a project-
                        specific plan to mitigate damage to (and to 
                        restore the health of) fish, wildlife, and 
                        other environmental resources, where such 
                        damage is attributable to the construction and 
                        operation of the facilities from which power is 
                        generated and sold.
                            (ii) Use of existing data, information, and 
                        plans.--In developing plans under clause (i), 
                        the Board of Directors, to the maximum extent 
                        practicable, shall rely on existing data, 
                        information, and mitigation and restoration 
                        plans developed by--
                                    (I) the Director of the Fish and 
                                Wildlife Service;
                                    (II) the Administrator of the 
                                Environmental Protection Agency; and
                                    (III) the heads of other Federal, 
                                State, and tribal agencies.
                    (D) Maximum amount.--
                            (i) In general.--The Fund shall maintain a 
                        balance of not more than $50,000,000 in excess 
                        of the amount that the Board of Directors 
                        determines is necessary to cover the costs of 
                        plans developed under clause (i).
                            (ii) Surplus revenue for debt reduction.--
                        Amounts allocated to the Fund under paragraph 
                        (1)(B)(ii) that, if deposited in the Fund, 
                        would exceed the maximum set forth in clause 
                        (i) shall be used by the Secretary of the 
                        Treasury to reduce the Federal debt.
            (3) Fund for renewable resources.--
                    (A) Establishment.--
                            (i) In general.--There is established in 
                        the Treasury of the United States a fund to be 
                        known as the Fund for Renewable Resources 
                        (referred to in this paragraph as the 
                        ``Fund''), consisting of funds allocated under 
                        paragraph (1)(B)(iii).
                            (ii) Administration.--The Fund shall be 
                        administered by the Secretary.
                    (B) Use.--Amounts in the Fund shall be available--
                            (i) to reimburse consumers in the region in 
                        which power is marketed by the Tennessee Valley 
                        Authority for that portion of the cost of 
                        acquiring power generated by nonhydroelectric 
                        renewable resources that exceeds the market 
                        price for power; and
                            (ii) to cover all costs incurred in 
                        establishing and administering the Fund.
                    (C) Resources development plan.--Amounts in the 
                Fund shall be expended only in accordance with a plan, 
                developed by the Secretary, that is designed to foster 
                the development of nonhydroelectric renewable resources 
                that show substantial long-term promise but that are 
                currently too expensive to attract private capital 
                sufficient to develop or ascertain their potential.
                    (D) Maximum amount.--
                            (i) In general.--The Fund shall maintain a 
                        balance of not more than $25,000,000 in excess 
                        of the amount that the Secretary determines is 
                        necessary to carry out the plan developed under 
                        subparagraph (C).
                            (ii) Surplus revenue for debt reduction.--
                        Amounts allocated to the Fund under paragraph 
                        (1)(B)(iii) that, if deposited in the Fund, 
                        would exceed the maximum set forth in clause 
                        (i) shall be used by the Secretary of the 
                        Treasury to reduce the Federal debt.
    (d) Treatment of Public Bodies and Cooperatives.--
            (1) Right of first refusal.--In auctioning hydroelectric 
        power under this section, the Secretary shall provide to public 
        bodies and cooperatives a right of first refusal to purchase 
        power at market prices.
            (2) Permissible uses of power.--
                    (A) In general.--Power purchased under a right of 
                first refusal described in paragraph (1) may be 
                consumed only by the public body or cooperative that 
                purchases it under such right or resold for consumption 
                by the customers of the public body or cooperative.
                    (B) Transmission access.--In accordance with 
                regulations issued by the Federal Energy Regulatory 
                Commission, public bodies and cooperatives shall have 
                transmission access to power purchased under paragraph 
                (1).
            (3) Competitive bidding.--Power not purchased by a public 
        body or cooperative under paragraph (1) shall be sold to the 
        next highest bidder in a competitive bidding process.
    (e) Termination of Long-Term Power Contracts.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Tennessee Valley Authority shall 
        terminate its long-term contracts with distributors and retail 
        customers.
            (2) Former distributors and retail customers.--After the 
        termination of contracts under paragraph (1), the distributors 
        and retail customers that were formerly parties to such 
        contracts may--
                    (A) acquire hydroelectric power under this section;
                    (B) acquire fossil and nuclear generating 
                facilities under section 3; and
                    (C) acquire power from suppliers other than the 
                Tennessee Valley Authority.
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