[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1468 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 1468
To stabilize the dysfunctional wholesale power market in the Western
United States, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 4, 2001
Mr. Inslee (for himself, Mr. Baca, Mr. Becerra, Mr. Baird, Mr. Berman,
Mr. Blumenauer, Mrs. Capps, Mr. Capuano, Mr. Condit, Mrs. Davis of
California, Mr. DeFazio, Mr. Dicks, Ms. Eshoo, Mr. Farr of California,
Mr. Filner, Mr. Gephardt, Ms. Harman, Mr. Honda, Ms. Hooley of Oregon,
Mr. Lantos, Mr. Larsen of Washington, Ms. Lofgren, Ms. Lee, Mr. Matsui,
Mr. McDermott, Mr. George Miller of California, Ms. Millender-McDonald,
Mrs. Napolitano, Ms. Pelosi, Ms. Schakowsky, Mr. Sherman, Mr. Smith of
Washington, Ms. Solis, Mr. Stark, Mrs. Tauscher, Mr. Thompson of
California, Ms. Waters, Mr. Waxman, Ms. Woolsey, and Mr. Wu) introduced
the following bill; which was referred to the Committee on Energy and
Commerce
_______________________________________________________________________
A BILL
To stabilize the dysfunctional wholesale power market in the Western
United States, 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 ``Energy Price and Economic Stability
Act of 2001''.
SEC. 2. FINDINGS.
The Congress finds that:
(1) Reliable and affordable energy is necessary to ensure
economic health and public safety.
(2) The western states have historically worked well
together to ensure that energy is sufficient to meet demand at
a reasonable cost.
(3) Despite the best efforts of the western states, an
emergency energy situation now exists.
(4) The Federal government should augment the states'
response to the emergency by protecting consumers from
excessive wholesale rates.
(5) Several factors have led to the existing emergency,
including the following: a flawed deregulation plan in the
State of California, the existence of market power among
generators in the western region, increased natural gas costs,
drought in the Northwest, rapid increases in the populations of
western states, poor regional and national forecasting of
energy needs, decreased operating reserves due to a lack of
investment in new generation.
(6) Federal and State efforts to protect the environment
have not significantly contributed to these problems.
(7) The region's energy needs can be met while protecting
the environment and public health.
(8) On November 1, 2000, and again on December 15, 2000,
the Federal Energy Regulatory Commission found that wholesale
electricity rates in the State of California were and have the
potential to be unjust and unreasonable under the Federal Power
Act.
(9) The Federal Energy Regulatory Commission issued orders
on March 9, 2001, March 14, 2001, and March 16, 2001 alleging
that generators had overcharged California utilities more than
$130 million.
(10) The Federal Energy Regulatory Commission orders only
reflect a fraction of total overcharges and do not reflect the
full period during which overcharges may have occurred.
(11) The California Independent System Operator reports
that generators may have overcharged California utilities by
more than $6 billion in the period between May 2000 and
February 2001.
(12) The market conditions that have existed in California,
Washington, and Oregon for months now exist in neighboring
states, where electricity costs are also rising.
(13) Unless the Federal Energy Regulatory Commission
intervenes in the western wholesale electricity market, nothing
will constrain the wholesale price of electricity and the
situation this coming summer may worsen by orders of magnitude.
(14) On March 9, 2001, the Governors of California, Oregon,
and Washington wrote to the Chairman and Commissioners of the
Federal Energy Regulatory Commission to request that cost-of-
service based rates be imposed in the western region.
(15) The Federal Energy Regulatory Commission has failed to
fulfill its obligations under the Federal Power Act to act in
the best interest of consumers by mandating just and reasonable
wholesale rates in the western energy market.
SEC. 3. WHOLESALE ELECTRICITY RATES IN THE WESTERN UNITED STATES.
(a) Definitions.--For purposes of this Act:
(1) The term ``Commission'' means the Federal Energy
Regulatory Commission.
(2) The term ``cost-of-service-based rate'' means a rate,
charge, or classification for the sale of electric energy that
is equal to the sum of the following:
(A) All variable and fixed costs of generating such
electric energy.
(B) Either--
(i) a reasonable risk premium, or
(ii) a return on invested capital used to
generate and transmit such electric energy that
reflects customary returns during the period
1994 through 1999.
(C) Other reasonable costs associated with the
acquisition, conservation, and transmission of such
electric energy.
(3) The term ``new generation facility'' means any facility
generating electric energy that did not generate electric
energy at any time prior to January 1, 2001.
(b) Exercise of Authority To Establish Cost-Based Rates.--Within 30
days after the enactment of this Act, the Commission shall issue an
order establishing cost-of-service-based rates for electric energy sold
at wholesale subject to the jurisdiction of the Commission under the
Federal Power Act for use in that portion of the United States that is
covered by the Western Systems Coordinating Council of the North
American Electric Reliability Council.
(c) Sunset.--Subsection (b) shall not apply to sales of electric
energy after March 1, 2003.
(d) New Facilities Not Covered.--The rates required under
subsection (b) shall not apply to any sale of electric energy generated
by any new generation facility.
(e) Enforcement.--
(1) State cause of action.--If a State determines that a
wholesale rate applicable to delivery of electricity within the
State is not in compliance with subsection (b) or is not just
and reasonable, the State may bring an action in the
appropriate United States district court. Upon adequate showing
that a rate is not in compliance with subsection (b) or is not
just and reasonable, the court shall order refunds or other
relief as appropriate.
(2) Civil penalties.--Any person who violates any
requirement of this section shall be subject to civil penalties
equal to 3 times the value of the amount involved in such
violation. The Commission shall assess such penalties, after
notice and opportunity for public hearing, in accordance with
the same provisions as are applicable under section 31(d) of
the Federal Power Act in the case of civil penalties assessed
under such section 31.
(f) Refunds.--In the case of sales of electric energy for use in
that portion of the United States that is covered by the Western
Systems Coordinating Council of the North American Electric Reliability
Council the Commission shall order the refund of any rates and charges
that were not just and reasonable and that applied to sales between
June 1, 2000 and the enactment of this Act. Any affected State may
bring an action in the appropriate United States district court to
enforce this subsection.
(g) Savings Provisions.--Nothing in this section shall affect any
authority of the Commission existing before the enactment of this
section.
SEC. 4. GUARANTEE OF PAYMENT REQUIRED FOR CERTAIN EMERGENCY POWER
SALES.
Section 202(c) of the Federal Power Act (16 U.S.C. 825(c)) is
amended by adding the following at the end thereof: ``Except during the
continuance of any war, no order may be issued under this subsection
unless the payment of compensation or reimbursement to the person
subject to such order is fully guaranteed by the United States
Government or by a State government.''.
SEC. 5. SEVERABILITY.
If any provision of this Act is found to be unenforceable or
invalid, no other provision of this Act shall be invalidated thereby.
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