[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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