[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3406 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 3406

   To benefit consumers and enhance the Nation's energy security by 
    removing barriers to the development of competitive markets for 
electric power, providing for the reliability and increased capacity of 
   the Nation's electric transmission networks, promoting the use of 
renewable and alternative sources of electric power generation, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 5, 2001

 Mr. Barton of Texas introduced the following bill; which was referred 
    to the Committee on Energy and Commerce, and in addition to the 
 Committees on Transportation and Infrastructure, and Resources, 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 benefit consumers and enhance the Nation's energy security by 
    removing barriers to the development of competitive markets for 
electric power, providing for the reliability and increased capacity of 
   the Nation's electric transmission networks, promoting the use of 
renewable and alternative sources of electric power generation, 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 ``Electric Supply and Transmission 
Act''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definitions.
                        TITLE I--ELECTRIC SUPPLY

      Subtitle A--Interconnection; Net Metering; Demand Management

Sec. 101. Interconnection.
Sec. 102. Federal standards for State net metering programs.
Sec. 103. Price-responsive demand programs.
  Subtitle B--Provisions Regarding Public Utility Holding Act of 1935

Sec. 111. Definitions.
Sec. 112. Repeal of the public utility holding company act of 1935.
Sec. 113. Federal access to books and records.
Sec. 114. State access to books and records.
Sec. 115. Exemption authority.
Sec. 116. Affiliate transactions.
Sec. 117. Applicability.
Sec. 118. Effect on other regulations.
Sec. 119. Enforcement.
Sec. 120. Savings provisions.
Sec. 121. Implementation.
Sec. 122. Transfer of resources.
Sec. 123. Effective date.
Sec. 124. Conforming amendment to the Federal power act.
Sec. 125. Effect on investment company act regulation.
Subtitle C--Provisions Regarding Public Utility Regulatory Policies Act 
                                of 1978

Sec. 131. Findings.
Sec. 132. Prospective repeal.
Sec. 133. Recovery of costs.
Sec. 134. Definitions.
            Subtitle D--Redundant Review of Certain Matters

Sec. 141. Repeal of certain provisions of Federal power act regarding 
                            disposition of property, consolidation, and 
                            purchase of securities.
Sec. 142. Elimination of duplicative antitrust review.
                    TITLE II--TRANSMISSION OPERATION

Sec. 201. Open access for all transmitting utilities.
Sec. 202. Regional transmission organizations.
                  TITLE III--TRANSMISSION RELIABILITY

Sec. 301. Electric reliability.
                 TITLE IV--TRANSMISSION INFRASTRUCTURE

Sec. 401. Sustainable transmission networks rulemaking.
Sec. 402. Transmission siting.
                       TITLE V--FEDERAL UTILITIES

                 Subtitle A--Tennessee Valley Authority

Sec. 501. Definitions.
Sec. 502. Wholesale competition in the Tennessee valley region.
Sec. 503. Tennessee valley authority power sales.
Sec. 504. Tennessee valley authority electric generation facilities.
Sec. 505. Renegotiation of power contracts.
Sec. 506. Regulation of Tennessee valley authority transmission system.
Sec. 507. Regulation of Tennessee valley authority distributors.
Sec. 508. Stranded cost recovery.
Sec. 509. Application of antitrust law.
Sec. 510. Savings provision.
                 Subtitle B--Bonneville Power Authority

Sec. 521. Definitions.
Sec. 522. Regulation of Bonneville transmission system.
Sec. 523. Authority of administrator to participate in regional 
                            transmission organization.
Sec. 524. Limitation on retail services.
Sec. 525. Direct service industries.
Sec. 526. Conforming amendments.
       Subtitle C--Other Federal Power Marketing Administrations

Sec. 531. Definitions.
Sec. 532. Wholesale power sales by Federal power marketing 
                            administrations.
Sec. 533. Regulation of Federal power marketing administration 
                            transmission systems.
Sec. 534. Accounting.
Sec. 535. Application of antitrust law.
                     TITLE VI--CONSUMER PROTECTIONS

Sec. 601. Electric supply unfair trade practices.
Sec. 602. Consumer privacy.
Sec. 603. Aggregation.
Sec. 604. State public purpose charges.
Sec. 605. State authority to order retail electric competition.
Sec. 606. Universal and affordable service.
   TITLE VII--INVESTIGATION AND CORRECTION OF ANTICOMPETITIVE CONDUCT

Sec. 701. Uniform investigation authority.
Sec. 702. Uniform refund authority.
Sec. 703. Criminal and civil penalties.

SEC. 3. DEFINITIONS.

    Section 3 of the Federal Power Act (16 U.S.C. 796) is amended by 
adding at the end the following:
            ``(26) Appropriate regulatory authority.--The term 
        `appropriate regulatory authority' means the entity with 
        authority over the interconnection at issue in the absence of 
        subsections (e) and (f) of section 210. As appropriate to the 
        context, the term shall mean--
                    ``(A) the Commission;
                    ``(B) a State commission;
                    ``(C) a municipality;
                    ``(D) a cooperative that is self-regulating under 
                State law and is not a public utility; or
                    ``(E) an Indian tribe.
            ``(27) Generating facility.--The term `generating facility' 
        means a facility that generates electric energy.
            ``(28) Local distribution utility.--The term `local 
        distribution utility' means an entity, including, 
        notwithstanding section 201(f), any State or municipal entity, 
        that owns, controls, or operates a local distribution facility 
        that is used for the sale of electric energy.
            ``(29) Non-federal regulatory authority.--The term `non-
        Federal regulatory authority' means an appropriate regulatory 
        authority other than the Commission.
            ``(30) Market participant.--The term `market participant' 
        means any entity that generates, sells, or aggregates electric 
        power (other than State-ordered transition or default service) 
        that is transmitted on the transmission system operated by a 
        regional transmission organization. Any entity that is the 
        owner of the regional transmission organization and does not 
        generate, sell, or aggregate electric power shall not be 
        considered a market participant. An entity is not a market 
        participant by reason of providing State-ordered transition 
        service, default service, or generation service necessary to 
        provide reactive power or such other generation service 
        incidental to providing transmission service.
            ``(31) Open access.--The term `open access', with respect 
        to local distribution facilities, means that the local 
        distribution company that owns, controls, or operates the 
        facilities offers access to the facilities that is not unduly 
discriminatory or preferential.
            ``(32) Retail electric consumer.--The term `retail electric 
        consumer' means any person who purchases electric energy for 
        ultimate consumption.
            ``(33) Retail electric supplier.--The term `retail electric 
        supplier' means any person who sells electric energy to a 
        retail electric consumer for ultimate consumption.
            ``(34) State regulated electric utility.--The term `State 
        regulated electric utility' means any electric utility with 
        respect to which a State commission has ratemaking authority.
            ``(35) Backup power.--The term `backup power' means 
        electricity supplied to a generating facility or retail 
        electric consumer when the generating facility is not 
        operating, in whole or in part, for--
                    ``(A) end use consumption by the generating 
                facility; or
                    ``(B) consumption by the retail electric consumer 
                that receives its electricity supply from the 
                generating facility,
        except that the obligation to provide backup power shall not 
        exceed the amount of power historically supplied by the 
        generating facility.
            ``(36) Independent transmission company.--The term 
        `independent transmission company' means any entity that owns 
        and operates transmission facilities and is independent of any 
        market participant.''.

                        TITLE I--ELECTRIC SUPPLY

      Subtitle A--Interconnection; Net Metering; Demand Management

SEC. 101. INTERCONNECTION.

    (a) Interconnection to Distribution Facilities.--Section 210 of the 
Federal Power Act (16 U.S.C. 824i) is amended by inserting after 
subsection (e) the following:
    ``(f) Interconnection to Distribution Facilities.--
            ``(1) Interconnection.--
                    ``(A) In general.--A local distribution utility 
                shall interconnect a generating facility with the 
                distribution facilities of the local distribution 
                utility if the owner of the generating facility--
                            ``(i) complies with the final rule 
                        promulgated under paragraph (2); and
                            ``(ii) pays the costs of the 
                        interconnection, including the generating 
                        facility's appropriate share of the necessary 
                        and reasonable costs associated with any 
                        upgrades to system facilities.
                    ``(B) Costs.--The costs of the interconnection 
                shall be--
                            ``(i) just and reasonable,
                            ``(ii) not unduly discriminatory or 
                        preferential, and
                            ``(iii) comparable to the costs charged by 
                        the local distribution utility for 
                        interconnection by any similarly situated 
                        generating facility to the distribution 
                        facilities of the local distribution utility, 
                        as determined by the appropriate regulatory 
                        authority.
                    ``(C) Applicable requirements.--The right of a 
                generating facility to interconnect under subparagraph 
                (A) does not--
                            ``(i) relieve the generating facility or 
                        the local distribution utility of other 
                        Federal, State, or local requirements;
                            ``(ii) include a right to transmission or 
                        distribution service for the generating 
                        facility; or
                            ``(iii) allow the generating facility or 
                        its customer to bypass or avoid payment of any 
                        costs approved for recovery by the appropriate 
                        regulatory authority, or deprive the generating 
                        facility or its customer of any rights or 
                        arguments it might have to avoid paying such 
                        costs.
            ``(2) Rule.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subsection, the Commission 
                shall promulgate a final rule establishing reasonable 
                and appropriate technical standards for the 
                interconnection of a generating facility with the 
                distribution facilities of a local distribution 
                utility, and shall provide for the updating or 
                modification of such standards when appropriate.
                    ``(B) Process.--To the extent feasible, the 
                Commission shall develop the standards through a 
                process involving interested parties, and shall rely, 
                where appropriate, on standards developed through 
                independent standard setting organizations.
            ``(3) Right to backup power.--
                    ``(A) In general.--In accordance with subparagraph 
                (B), a local distribution utility shall offer to 
                provide backup power, as defined in paragraph (35) of 
                section 3, to a generating facility or a retail 
                electric consumer to the extent that the local 
                distribution utility is obligated under State law to 
                provide electricity supply service to retail electric 
                consumers in the area in which the generating facility 
                is located and
                            ``(i) is not subject to an order of a non-
                        Federal regulatory authority to provide open 
                        access to its facilities;
                            ``(ii) has not offered to provide open 
                        access to its facilities; or
                            ``(iii) does not allow a generating 
                        facility to purchase backup power from another 
                        entity using its facilities under terms that 
                        are just and reasonable, and not unduly 
                        discriminatory or preferential.
                    ``(B) Rates, terms, and conditions.--A sale of 
                backup power under subparagraph (A), for both firm and 
interruptible backup power service, shall be at such rates and under 
such terms and conditions, as determined by and filed with the 
appropriate regulatory authority, as are just and reasonable and not 
unduly discriminatory or preferential, taking into account--
                            ``(i) the actual incremental cost, whenever 
                        incurred by the local distribution utility, to 
                        supply such backup power service during the 
                        period in which the backup power service is 
                        provided, and
                            ``(ii) any capacity charges assessed 
                        against similarly situated generating 
                        facilities in the area in which the generating 
                        facility is located.
                    ``(C) No requirement for certain sales.--A local 
                distribution utility shall not be required to provide 
                backup power for resale.
                    ``(D) New or expanded loads.--To the extent backup 
                power is used to serve a new or expanded load on the 
                distribution system, the generating facility shall pay 
                the appropriate share of the necessary and reasonable 
                costs associated with any upgrades to transmission, 
                distribution, or generation facilities required to 
                provide such service, as determined by the appropriate 
                regulatory authority.
            ``(4) Administration.--
                    ``(A) By a non-federal regulatory authority.--
                Except where subject to the jurisdiction of the 
                Commission pursuant to provisions other than 
                subparagraph (B), a non-Federal regulatory authority 
                may administer and enforce the rule promulgated under 
                subparagraph (2)(A) and administer and enforce the 
                requirements of paragraph 3 for backup power.
                    ``(B) By the commission.--To the extent that a non-
                Federal regulatory authority does not administer and 
                enforce the rule or the backup power requirements, the 
                Commission shall administer and enforce the rule or the 
                backup power requirements, as appropriate, with respect 
                to interconnection in that jurisdiction.''.
    (b) Interconnection to Transmission Facilities.--Section 210 of the 
Federal Power Act (16 U.S.C. 824i) is amended by inserting after 
subsection (f) (as added by subsection (a) of this Act) the following:
    ``(g) Interconnection to Transmission Facilities.--
            ``(1) Interconnection.--
                    ``(A) Definition.--For purposes of this subsection 
                and subsection (h), the term `transmitting utility' 
                means any entity (notwithstanding section 201 (f)) that 
                owns, controls, or operates an electric power 
                transmission facility that is used for the sale of 
                electric energy.
                    ``(B) In general.--Notwithstanding subsections (a) 
                and (c), a transmitting utility shall interconnect a 
                generating facility with the transmission facilities of 
                the transmitting utility if the owner of the generating 
                facility--
                            ``(i) complies with the final rule 
                        promulgated under paragraph (2); and
                            ``(ii) pays the costs of the 
                        interconnection, including the generating 
                        facility's appropriate share of the necessary 
                        and reasonable costs associated with any 
                        upgrades to system facilities.
                    ``(C) Costs.--
                            ``(i) In general.--The costs of the 
                        interconnection shall be--
                                    ``(I) comparable to the costs 
                                charged by the transmitting utility for 
                                interconnection by any similarly 
                                situated generating facility to the 
                                transmission facilities of the 
                                transmitting utility, or
                                    ``(II) otherwise negotiated and 
                                agreed to by the parties, provided that 
                                such costs are approved by the 
                                Commission as just and reasonable and 
                                not unduly discriminatory or 
                                preferential.
                            ``(ii) Determination of interconnection 
                        costs.--A non-Federal regulatory authority 
                        that, under section 206(e)(2) (as added by 
                        section 201(a) of this Act), is authorized to 
                        determine the rates for transmission service on 
                        facilities subject to its jurisdiction shall be 
                        authorized to determine the costs of any 
                        interconnection to such facilities under this 
                        subparagraph in accordance with that provision 
                        of Federal law.
                    ``(D) Applicable requirements.--The right of a 
                generating facility to interconnect under subparagraph 
                (B) does not--
                            ``(i) relieve the generating facility or 
                        the transmitting utility of other Federal, 
                        State, or local requirements;
                            ``(ii) include a right to transmission or 
                        distribution service for the generating 
                        facility; or
                            ``(iii) allow the generating facility or 
                        its customer to bypass or avoid payment of any 
                        costs approved for recovery by the appropriate 
                        regulatory authority, or deprive the generating 
                        facility or its customer of any rights or 
                        arguments it might have to avoid paying such 
                        costs.''.
            ``(2) Rule.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subsection, the Commission 
                shall promulgate a final rule establishing reasonable, 
                appropriate, and technically feasible technical 
                standards for the interconnection of a generating 
                facility with the transmission facilities of a 
                transmitting utility.
                    ``(B) Process.--To the extent feasible, the 
                Commission shall develop the standards through a 
                process involving interested parties, and shall rely, 
                where appropriate, on standards developed through 
                independent standard setting organizations.
            ``(3) Right to backup power.--
                    ``(A) In general.--In accordance with subparagraph 
                (B), a local distribution utility that is obligated 
                under State law to provide electricity supply to retail 
                electric consumers in the area in which the generating 
                facility is located shall offer to provide backup power 
                to the generating facility at the interconnection point 
                and to a retail electric consumer, in accordance with 
                the definition set forth in section 3(35), unless--
                            ``(i) Federal, State, or local law 
                        (including regulations) allows such a 
                        generating facility or retail electric consumer 
                        to purchase backup power from an entity other 
                        than the local distribution utility; or
                            ``(ii) the local distribution utility 
                        allows a generating facility to purchase backup 
                        power from an entity other than the local 
                        distribution utility using--
                                    ``(I) the transmission facilities 
                                of the transmitting utility; or
                                    ``(II) the transmission facilities 
                                of any other transmitting utility that 
                                allows such transmission.
                    ``(B) Rates, terms, and conditions.--A sale of 
                backup power under subparagraph (A), for both firm and 
                interruptible backup power service, shall be at such 
                rates and under such terms and conditions, as 
                determined by and filed with the appropriate regulatory 
                authority, as are just and reasonable and not unduly 
                discriminatory or preferential, taking into account--
                            ``(i) the actual incremental cost, whenever 
                        incurred by the local distribution utility, to 
                        supply such backup power service during the 
                        period in which the backup power service is 
                        provided, and
                            ``(ii) any capacity charges assessed 
                        against similarly situated generating 
                        facilities in the area in which the generating 
                        facility is located.
                    ``(C) No requirement for certain sales.--A local 
                distribution utility shall not be required to provide 
                backup power for resale.
                    ``(D) New or expanded loads.--To the extent backup 
                power is used to serve a new or expanded load on the 
                transmission system, the generating facility shall pay 
                the appropriate share of the necessary and reasonable 
                costs associated with any upgrades to transmission, 
                distribution, or generating facilities required to 
                provide such service, as determined by the appropriate 
                regulatory authority.
                    ``(E) Administration.--
                            ``(i) By a non-federal regulatory 
                        authority.--Except there subject to the 
                        jurisdiction of the Commission pursuant to 
                        provisions other than clause (ii), a non-
                        Federal regulatory authority may administer and 
                        enforce the requirements of this paragraph for 
                        backup power.
                            ``(ii) By the commission.--To the extent 
                        that a non-Federal regulatory authority does 
                        not administer and enforce the backup power 
                        requirements, the Commission shall administer 
                        and enforce the backup power requirements with 
                        respect to interconnection in that 
                        jurisdiction.''.
    (c) Transmission Interconnection Process and Procedures.--Section 
210 of the Federal Power Act is amended by inserting after subsection 
(g) (as added by subsection (b)) the following:
    ``(h) Transmission Interconnection Process and Procedures.--(1) 
Within 180 days of the enactment of this section, the Commission shall 
issue a rule establishing procedures governing--
            ``(A) the interconnection of new generating facilities to a 
        transmission system owned or operated by any transmitting 
        utility or any regional transmission organization approved by 
        the Commission; and
            ``(B) the increase in capacity of an existing generating 
        facility interconnected to a transmission system owned or 
        operated by any transmitting utility or any regional 
        transmission organization approved by the Commission.
Such rulemaking proceeding shall establish interconnection procedures 
and required elements for interconnection agreements as provided in 
paragraphs (2) and (3). The Commission shall apply similar procedures 
and required elements to the interconnection of new generating 
facilities to a distribution system to the extent that the Commission 
has jurisdiction to do so pursuant to paragraph (f)(4) of this section. 
Nothing in this Section or Subsection shall affect the terms and 
conditions of existing agreements between qualifying facilities and 
utilities pursuant to 18 CFR 292.
            ``(2) Interconnection procedures.--Pursuant to the 
        rulemaking proceeding under paragraph (1) of this subsection, 
        the Commission shall establish interconnection procedures to 
        govern the process in which any transmitting utility or 
        regional transmission organization responds to and resolves 
        interconnection requests. Such procedures shall include 
        provisions governing each of the following:
                    ``(A) The study or studies to be conducted to 
                ensure that the interconnection can occur without 
                compromising the reliability of the system being 
                interconnected.
                    ``(B) The time frames for completing such study or 
                studies.
                    ``(C) The priorities among generating facilities 
                that submit interconnection requests.
                    ``(D) The rights that new generating facilities 
                have upon interconnection.
                    ``(E) Compensation, if and as appropriate, for 
                transmitting utilities or regional transmission 
                organizations for the costs of processing the 
                interconnection requests.
                    ``(F) Criteria for assuring that such 
                interconnections will meet applicable reliability 
                standards and will not adversely affect existing 
                transmission operations or service.
                    ``(G) Criteria for assuring that such 
                interconnections will not violate applicable laws 
                (including safety and environmental laws), rules, or 
                contracts.
        Any transmitting utility or regional transmission organization 
        shall include such interconnection procedures in its tariffs 
        filed with and approved by the Commission under section 205 of 
        this Act. The Commission may approve different or additional 
        provisions in the interconnection procedures if the different 
        or additional provisions are substantially comparable with the 
        procedures established by the Commission pursuant to this 
        section.
            ``(3) Required elements for interconnection agreements.--
        Pursuant to the rulemaking proceeding under paragraph (1) of 
        this subsection, the Commission shall also identify the 
        required elements for interconnection agreements. Each such 
        interconnection agreement shall contain provisions respecting--
                    ``(A) the cost responsibility for facilities 
                necessary to interconnect the new generating facility 
                or for upgrades to the transmission system required to 
                allow the reliable interconnection of the new 
                generating facility;
                    ``(B) the security and creditworthiness 
                requirements for constructing the interconnection 
                facilities or system upgrades;
                    ``(C) the methods for preserving the 
                confidentiality of information exchanged between any 
                new generating facility, and any transmitting utility 
                or regional transmission organization;
                    ``(D) the requirements for operating any new 
                generating facility in parallel with the transmission 
                system; and
                    ``(E) the methods for resolving disputes between 
                any new generating facility, and any transmitting 
                utility or regional transmission organization.
            ``(4) Execution of interconnection agreement.--Each 
        interconnection agreement under this section shall be executed 
        both by any new generating facility, and by any transmitting 
        utility or regional transmission organization before the 
        commencement of the construction of facilities necessary to 
        interconnect such new generating facility. Such generating 
        facility and transmitting utility or regional transmission 
        organization may agree to different or additional terms and 
        conditions in their interconnection agreement than required 
        under paragraph 3 if they are consistent with the elements for 
        interconnection agreements established by the Commission. The 
        Commission shall resolve any dispute between the parties to 
        such an agreement or any refusal to execute such an agreement 
        within sixty days of notice by either party of the dispute or 
        refusal.
            ``(5) Exemption from commission approved procedures.--Any 
        transmitting utility or regional transmission organization 
        shall be exempted by the Commission from the requirements of 
        this subsection, upon a showing by the transmitting utility, 
        regional transmission organization, or a generating facility 
        that substantially comparable interconnection procedures and 
        agreements have previously been filed with and approved by the 
        Commission for interconnection with that entity. Any 
        interconnecting generating facility may be entitled to 
        interconnect with that entity under such substantially 
        comparable interconnection procedures and agreements.''.
    (d) Conforming Amendments.--Section 210 of the Federal Power Act 
(16 U.S.C. 824i) is amended as follows:
            (1) In subsection (a)(1)--
                    (A) by inserting ``transmitting utility, local 
                distribution utility,'' after ``electric utility,''; 
                and
                    (B) in subparagraph (A), by inserting ``any 
                transmitting utility,'' after ``small power production 
                facility,''.
            (2) In subsection (c)(2)--
                    (A) in subparagraph (B), by striking ``or'' at the 
                end;
                    (B) in subparagraph (C), by striking ``and'' at the 
                end and inserting ``or''; and
                    (C) by adding at the end the following:
                    ``(D) promote competition in electricity markets, 
                and''.
            (3) In subsection (d), by striking the last sentence.
            (4) In subsection (e)(1), by inserting ``subsections (a) 
        through (d) of'' after ``used in''.

SEC. 102. FEDERAL STANDARDS FOR STATE NET METERING PROGRAMS.

    (a) Findings.--The Congress finds that it is in the public interest 
to:
            (1) Enable small businesses, residences, schools, churches, 
        farms, and other retail electric customers who generate 
        electric energy to reduce their electric bills.
            (2) Encourage private investment in renewable and 
        unconventional energy resources.
            (3) Enhance the diversity of the Nation's electric supply 
        by increasing reliance on a wide range of renewable and other 
        environmentally sound distributed generation technologies.
            (4) Reduce price volatility and enhance reliability by 
        reducing peak load on centrally generated power supplies.
            (5) Protect the environment by promoting clean energy 
        sources.
    (b) Net Metering.--Part II of the Federal Power Act is amended by 
adding the following new section at the end thereof:

``SEC. 215. STATE NET METERING PROGRAMS.

    ``(a) Definitions.--As used in this section--
            ``(1) The term `customer generator' means the owner or 
        operator of an electric generation unit qualified for net 
        metering under this section.
            ``(2) The term `net metering' means measuring the 
        difference between the electricity supplied to a customer-
        generator and the electricity generated by a customer-generator 
        that is delivered to a local distribution system as the same 
        point of interconnection during an applicable billing period, 
        and providing a crediting to the customer-generator for the net 
        amount, if any, by which the electricity generated by the 
        customer-generator exceeds the electricity supplied to the 
        customer generator during that billing period.
            ``(3) The terms `electric generation unit qualified for net 
        metering' and `qualified generation unit' mean an electric 
        energy generation unit that meets the requirements of 
        subsection (b)(1) of this section.
            ``(4) The term `retail electric supplier' means any person 
        that sells electric energy to the ultimate consumer thereof.
            ``(5) The term `local distribution system' means any system 
        for the distribution of electric energy to the ultimate 
        consumer thereof, whether or not the owner or operator of such 
        system is also a retail electric supplier.
    ``(b) Net Metering Requirement.--Each State, electric utility not 
regulated by a State, and Federal power marketing agency shall consider 
establishing a net metering program, or modifying an existing program, 
to meet the minimum Federal standards set forth in subsection (c) of 
this section. If the Commission determines that a State, electric 
utility not regulated by a State, or Federal power marketing agency has 
not established a net metering program that meets such minimum 
standards within 1 year after the effective date of the interconnection 
standards (for distribution facilities) required under section 210(e) 
of this Act, the Commission shall establish a program (in such State or 
in the service territory of such electric utility or Federal power 
marketing agency) consistent with such standards.
    ``(c) Minimum Federal Standards for State and Other Net Metering 
Programs.--
            ``(1) Qualified generation unit.--A generation unit that 
        meets the following requirements qualifies for net metering 
        under this section:
                    ``(A) The unit is a fuel cell or uses as its energy 
                source either solar, wind, or biomass.
                    ``(B) The unit has a generating capacity of up to 
                250 kilowatts.
                    ``(C) The unit is located on premises that are 
                owned, operated, leased, or otherwise controlled by the 
                customer-generator.
                    ``(D) The unit operates in parallel with the retail 
                electric supplier.
                    ``(E) The unit is used primarily to offset part or 
                all of the customer-generator's requirements for 
                electric energy.
                    ``(F) The unit is not intended to offset or provide 
                credits for electric consumption at another location of 
                the customer or for any other customer.
            ``(2) Metering and costs.--The retail electric supplier 
        shall make available upon request net metering service to any 
        customer-generator that the supplier serves if the retail 
        customer-generator pays any incremental costs, including those 
        incurred by suppliers and local distribution systems for 
        equipment or services for safety or performance that are 
        necessary to meet the standards referred to in this section. If 
        a State, nonregulated utility, or Federal power marketing 
        agency determines that the use of a real-time net meter or 
        interval net meter will advance the purposes of this section 
        for such units, a customer-generator in that State (or, in the 
        case of a nonregulated utility or Federal power marketing 
        agency, the relevant service territory) may be required to use 
        the appropriate meter and pay the reasonable incremental costs 
        for such meter and its installation.
            ``(3) Rates.--Rates and charges for retail electric service 
        to customer-generators, including the amount of a net metering 
        credit, shall be established by the appropriate State 
        regulatory authority and nonpublic utilities. To the extent 
        that a State regulatory authority, nonregulated utility, or 
        Federal power marketing agency does not establish such rates 
        and charges, such rates and charges shall be established by the 
        Commission. The rates and charges established pursuant to this 
        section shall be just and reasonable and shall promote the 
        purposes of this section.
            ``(4) Safety and performance standards.--A qualified 
        generation unit and net metering system used by a customer-
        generator shall meet all applicable safety and performance and 
        reliability standards established by the national electrical 
        code, the Institute of Electrical and Electronic Engineers, 
        Underwriters Laboratories, or the American National Standards 
        Institute, except that a State may adopt additional or 
        different standards provided that such standard is consistent 
        with the purposes of this section and does not impose an unjust 
        or unreasonable burden on a customer-generator that seeks to 
        participate in the State's net metering program.
            ``(5) State authority to establish additional 
        requirements.--Consistent with the limits of its jurisdiction 
        under this part, nothing in this section shall preclude a State 
        from establishing or imposing--
                    ``(A) requirements or incentives to encourage 
                qualified generation and net metering that are in 
                addition to or in excess of the minimum standards 
                established in this section (including but not limited 
                to additional eligible fuels, higher capacity limits, 
                and credit amounts that vary by fuel or capacity);
                    ``(B) limits on the State-wide aggregate amount of 
                generating capacity of customer-generators with 
                qualified generation facilities and net metering 
                systems, provided that such limits are not unduly 
                discriminatory and are consistent with the purposes of 
                this section; or
                    ``(C) administrative and enforcement procedures and 
                requirements such State deems necessary or appropriate 
                to implement a net metering program under this section, 
                if such procedures and requirements are consistent with 
                the purposes of this section and does not impose an 
                unjust or unreasonable burden on a customer-generator 
                that seeks to participate in the State's net metering 
                program.
            ``(6) Interconnection standards.--Retail electric suppliers 
        and customer-generators shall be subject to Federal 
        interconnection standards established under section 210(e) of 
        this Act (relating to interconnection to distribution 
        facilities).
            ``(7) Not a wholesale sale.--A net metering credit under a 
        net metering program established under this section shall not 
        be considered a sale for resale for the purposes of Federal or 
        State law.''.

SEC. 103. PRICE-RESPONSIVE DEMAND PROGRAMS.

    (a) Finding.--The Congress finds that price-responsive demand 
mechanisms are necessary to enable customer participation in wholesale 
energy markets, reduce loads, improve reliability, expand customer 
options, and lower costs when bulk energy prices are high.
    (b) Demand Response Programs.--The Federal Energy Regulatory 
Commission shall develop and implement price-responsive demand programs 
in consultation with the States, regional transmission organizations, 
electric utilities, Federal power marketing agencies, and the Secretary 
of Energy. Such programs shall be designed, to the extent practicable, 
to meet a goal of reducing annual peak demand by at least 5 percent 
relative to annual peak demand in calendar year 2001. Such programs 
shall not preempt or displace existing non-Federal price responsive 
demand programs.
    (c) Specific Requirements.--Programs implemented under this section 
shall serve a variety of customer groups and address removal of 
barriers in utility, market and regulatory arenas that hamper demand-
side programs, distributed generation, advanced metering, and other 
relevant enabling technologies.

  Subtitle B--Provisions Regarding Public Utility Holding Act of 1935

SEC. 111. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``affiliate'' of a company means any company 5 
        percent or more of the outstanding voting securities of which 
        are owned, controlled, or held with power to vote, directly or 
        indirectly, by such company.
            (2) The term ``associate company'' of a company means any 
        company in the same holding company system with such company.
            (3) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (4) The term ``company'' means a corporation, partnership, 
        association, joint stock company, business trust, or any 
        organized group of persons, whether incorporated or not, or a 
        receiver, trustee, or other liquidating agent of any of the 
        foregoing.
            (5) 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.
            (6) The terms ``exempt wholesale generator'' and ``foreign 
        utility company'' have the same meanings as in sections 32 and 
        33, respectively, of the Public Utility Holding Company Act of 
        1935, as those sections existed on the day before the effective 
        date of this subtitle.
            (7) 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 or distribution to tenants or employees of the 
        company operating such facilities for their own use and not for 
        resale) of natural or manufactured gas for heat, light, or 
        power.
            (8) The term ``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 company or holding 
                company as to make it necessary or appropriate for the 
                protection of utility customers with respect to rates 
                that such person be subject to the obligations, duties, 
                and liabilities imposed by this subtitle upon holding 
                companies.
            (9) The term ``holding company system'' means a holding 
        company, together with its subsidiary companies.
            (10) The term ``jurisdictional rates'' means rates 
        established by the Commission for the transmission of electric 
        energy in interstate commerce, the sale of electric energy at 
        wholesale in interstate commerce, the transportation of natural 
        gas in interstate commerce, and the sale in interstate commerce 
        of natural gas for resale for ultimate public consumption for 
        domestic, commercial, industrial, or any other use.
            (11) The term ``natural gas company'' means a person 
        engaged in the transportation of natural gas in interstate 
        commerce or the sale of such gas in interstate commerce for 
        resale.
            (12) The term ``person'' means an individual or company.
            (13) The term ``public utility'' means any person who owns 
        or operates facilities used for transmission of electric energy 
        in interstate commerce or sales of electric energy at wholesale 
        in interstate commerce.
            (14) The term ``public utility company'' means an electric 
        utility company or a gas utility company.
            (15) 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 laws of such State, has jurisdiction to 
        regulate public utility companies.
            (16) 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 utility 
                customers with respect to rates that such person be 
                subject to the obligations, duties, and liabilities 
                imposed by this subtitle upon subsidiary companies of 
                holding companies.
            (17) 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.

SEC. 112. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

    The Public Utility Holding Company Act of 1935 (15 U.S.C. 79a and 
following) is repealed, effective 12 months after the date of enactment 
of this Act.

SEC. 113. FEDERAL ACCESS TO BOOKS AND RECORDS.

    (a) In General.--Each holding company and each associate company 
thereof shall maintain, and shall make available to the Commission, 
such books, accounts, memoranda, and other records as the Commission 
determines are necessary to identify costs incurred by a public utility 
or natural gas company that is an associate company of such holding 
company and necessary or appropriate for the protection of utility 
customers with respect to jurisdictional rates.
    (b) Affiliate Companies.--Each affiliate of a holding company or of 
any subsidiary company of a holding company shall maintain, and make 
available to the Commission, such books, accounts, memoranda, and other 
records with respect to any transaction with another affiliate, as the 
Commission determines are necessary to identify costs incurred by a 
public utility or natural gas company that is an associate company of 
such holding company and necessary or appropriate for the protection of 
utility customers with respect to jurisdictional rates.
    (c) Holding Company Systems.--The Commission may examine the books, 
accounts, memoranda, and other records of any company in a holding 
company system, or any affiliate thereof, as the Commission determines 
are necessary to identify costs incurred by a public utility or natural 
gas company within such holding company system and necessary or 
appropriate for the protection of utility customers with respect to 
jurisdictional rates.
    (d) Confidentiality.--No member, officer, or employee of the 
Commission shall divulge any fact or information that may come to his 
or her knowledge during the course of examination of books, accounts, 
memoranda, or other records as provided in this section, except as may 
be directed by the Commission or by a court of competent jurisdiction.

SEC. 114. STATE ACCESS TO BOOKS AND RECORDS.

    (a) In General.--Upon the written request of a State commission 
having jurisdiction to regulate a public utility company in a holding 
company system, and subject to such terms and conditions as may be 
necessary and appropriate to safeguard against unwarranted disclosure 
to the public of any trade secrets or sensitive commercial information, 
a holding company or its associate company or affiliate thereof, 
wherever located, shall produce for inspection books, accounts, 
memoranda, and other records that--
            (1) have been identified in reasonable detail in a 
        proceeding before the State commission;
            (2) the State commission determines are necessary to 
        identify costs incurred by such public utility company; and
            (3) are necessary for the effective discharge of the 
        responsibilities of the State commission with respect to such 
        proceeding.
    (b) Effect on State Law.--Nothing in this section shall preempt 
applicable State law concerning the provision of books, accounts, 
memoranda, or other records, or in any way limit the rights of any 
State to obtain books, accounts, memoranda, or other records under 
Federal law, contract, or otherwise.
    (c) Court Jurisdiction.--Any United States district court located 
in the State in which the State commission referred to in subsection 
(a) is located shall have jurisdiction to enforce compliance with this 
section.

SEC. 115. EXEMPTION AUTHORITY.

    (a) Rulemaking.--Not later than 90 days after the date of enactment 
of this Act, the Commission shall promulgate a final rule to exempt 
from the requirements of section 113 any person that is a holding 
company, solely with respect to one or more--
            (1) qualifying facilities under the Public Utility 
        Regulatory Policies Act of 1978;
            (2) exempt wholesale generators; or
            (3) foreign utility companies.
    (b) Other Authority.--If, upon application or upon its own motion, 
the Commission finds that the books, accounts, memoranda, and other 
records of any person are not relevant to the jurisdictional rates of a 
public utility company or natural gas company, or if the Commission 
finds that any class of transactions is not relevant to the 
jurisdictional rates of a public utility company, the Commission shall 
exempt such person or transaction from the requirements of section 113.

SEC. 116. AFFILIATE TRANSACTIONS.

    Nothing in this subtitle shall preclude the Commission or a State 
commission from exercising its jurisdiction under otherwise applicable 
law to determine whether a public utility company, public utility, or 
natural gas company may recover in rates any costs of an activity 
performed by an associate company, or any costs of goods or services 
acquired by such public utility company, public utility, or natural gas 
company from an associate company.

SEC. 117. APPLICABILITY.

    No provision of this subtitle shall apply to, or be deemed to 
include--
            (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 entity 
        referred to in paragraph (1), (2), or (3); or
            (5) any officer, agent, or employee of any entity referred 
        to in paragraph (1), (2), or (3) acting as such in the course 
        of such officer, agent, or employee's official duty.

SEC. 118. EFFECT ON OTHER REGULATIONS.

    Nothing in this subtitle precludes the Commission or a State 
commission from exercising its jurisdiction under otherwise applicable 
law to protect utility customers.

SEC. 119. 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. 825e-825p) to 
enforce the provisions of this subtitle.

SEC. 120. SAVINGS PROVISIONS.

    (a) In General.--Nothing in this subtitle prohibits a person from 
engaging in or continuing to engage in activities or transactions in 
which it is legally engaged or authorized to engage on the date of 
enactment of this Act, if that person continues to comply with the 
terms of any such authorization, whether by rule or by order.
    (b) Effect on Other Commission Authority.--Nothing in this subtitle 
limits the authority of the Commission under the Federal Power Act (16 
U.S.C. 791a and following) (including section 301 of that Act) or the 
Natural Gas Act (15 U.S.C. 717 and following) (including section 8 of 
that Act).

SEC. 121. IMPLEMENTATION.

    Not later than 12 months after the date of enactment of this Act, 
the Commission shall--
            (1) promulgate such regulations as may be necessary or 
        appropriate to implement this subtitle; and
            (2) submit to the Congress detailed recommendations on 
        technical and conforming amendments to Federal law necessary to 
        carry out this subtitle and the amendments made by this 
        subtitle.

SEC. 122. TRANSFER OF RESOURCES.

    All books and records that relate primarily to the functions 
transferred to the Commission under this subtitle shall be transferred 
from the Securities and Exchange Commission to the Commission.

SEC. 123. EFFECTIVE DATE.

    This subtitle shall take effect 12 months after the date of 
enactment of this Act.

SEC. 124. CONFORMING AMENDMENT TO THE FEDERAL POWER ACT.

    Section 318 of the Federal Power Act (16 U.S.C. 825q) is repealed.

SEC. 125. EFFECT ON INVESTMENT COMPANY ACT REGULATION.

    (a) Grandfather of Existing Holdings.--A person that, on December 
31, 2001--
            (1) was an affiliate of a holding company, and
            (2) held investment securities of one or more companies 
        engaged directly or indirectly in the electric or gas utility 
        business, or other permitted business activities for a 
        registered holding company and its subsidiaries,
shall not be treated as being an investment company under section 
3(a)(1)(C) of the Investment Company Act of 1940 (15 U.S.C. 80a-
3(a)(1)(C)) on the basis of investing, reinvesting, owning, holding, or 
trading any investment securities issued by companies in which such 
person held such investment securities as of such date.
    (b) Definitions.--As used in subsection (a):
            (1) Holding company.--The term ``holding company'' has the 
        meaning provided in section 2(a)(7) of the Public Utilities 
        Holding Company Act of 1935 (15 U.S.C. 79b(a)(7)).
            (2) Affiliate.--The term ``affiliate'' has the meaning 
        provided in section 2(a)(11) of such Act (15 U.S.C. 
        79b(a)(11)).
            (3) Investment securities.--The term ``investment 
        securities'' has the meaning provided in section 3(a)(2) of the 
        Investment Company Act of 1940 (15 U.S.C. 80a-3(a)(2)).

Subtitle C--Provisions Regarding Public Utility Regulatory Policies Act 
                                of 1978

SEC. 131. FINDINGS.

    The Congress finds that--
            (1) implementation of section 210 of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) resulted in 
        many consumers paying excessive rates for electricity;
            (2) the Energy Policy Act of 1992 gives nonregulated 
        producers of electricity additional access to the wholesale 
        electric market through transmission access and exemption from 
        the Public Utility Holding Company Act of 1935; and
            (3) in light of the competitive wholesale electric 
        marketplace brought about by the Energy Policy Act of 1992, 
        section 210 of the Public Utility Regulatory Policies Act of 
        1978 need no longer exist.

SEC. 132. PROSPECTIVE REPEAL.

    (a) New Contracts.--After the date of enactment of this Act, no 
electric utility shall be required to enter into a new contract or 
obligation to purchase or to sell electric energy or capacity pursuant 
to section 210 of the Public Utility Regulatory Policies Act of 1978.
    (b) Existing Rights and Remedies Not Affected.--Nothing in this 
section affects the rights or remedies of any party with respect to the 
purchase or sale of electric energy or capacity from or to a facility 
determined to be a qualifying small power production facility or a 
qualifying cogeneration facility under section 210 of the Public 
Utility Regulatory Policies Act of 1978 pursuant to any contract or 
obligation to purchase or to sell electric energy or capacity in effect 
on January 6, 1999, including the right to recover the costs of 
purchasing such electric energy or capacity.
    (c) Interpretations and Actions Taken.--Nothing in this Act may be 
deemed or construed as implying congressional ratification of any 
interpretation of, or any action taken pursuant to, the Public Utility 
Regulatory Policies Act of 1978.

SEC. 133. RECOVERY OF COSTS.

    In order to assure recovery by electric utilities purchasing 
electric energy or capacity from a qualifying facility pursuant to any 
legally enforceable obligation entered into or imposed pursuant to 
section 210 of the Public Utility Regulatory Policies Act of 1978 prior 
to the date of enactment of this Act of all costs associated with such 
purchases, the Commission shall promulgate and enforce such regulations 
as may be required to assure that no utility shall be required directly 
or indirectly to absorb the costs associated with such purchases from a 
qualifying facility. Such regulations shall be treated as a rule 
enforceable under the Federal Power Act (16 U.S.C. 791a-825r).

SEC. 134. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (2) The term ``electric utility'' means any person, State 
        agency, or Federal agency, which sells electric energy.
            (3) The term ``qualifying small power production facility'' 
        has the same meaning as provided in section 3(17)(C) of the 
        Federal Power Act.
            (4) The term ``qualifying cogeneration facility'' has the 
        same meaning as provided in section 3(18)(A) of the Federal 
        Power Act.
            (5) The term ``qualifying facility'' means either a small 
        power production facility or a qualifying cogeneration 
        facility.

            Subtitle D--Redundant Review of Certain Matters

SEC. 141. REPEAL OF CERTAIN PROVISIONS OF FEDERAL POWER ACT REGARDING 
              DISPOSITION OF PROPERTY, CONSOLIDATION, AND PURCHASE OF 
              SECURITIES.

    Section 203 of the Federal Power Act (16 U.S.C. 824b) is repealed.

SEC. 142. ELIMINATION OF DUPLICATIVE ANTITRUST REVIEW.

    (a) In General.--Section 105 of the Atomic Energy Act of 1954 (42 
U.S.C. 2135) is amended by striking subsection c. and inserting the 
following:
    ``c. Conditions.--
            ``(1) In general.--A condition for a grant of a license 
        imposed by the Commission under this section in effect on the 
        date of enactment of the Electric Supply and Transmission Act 
        shall remain in effect until the condition is modified or 
        removed by the Commission.
            ``(2) Modification.--If a person that is licensed to 
        construct or operate a utilization or production facility 
        applies for reconsideration under this section of a condition 
        imposed in the person's license, the Commission shall conduct a 
        proceeding, on an expedited basis, to determine whether the 
        license condition--
                    ``(A) is necessary to ensure compliance with 
                subsection a.; or
                    ``(B) should be modified or removed.''.
    (b) Savings Provision.--(1) Nothing in this section or the 
amendments made by this section shall be construed to modify, impair, 
or supersede the applicability of any of the antitrust laws.
    (2) As used in this subsection, the term ``antitrust laws'' has the 
meaning given it in subsection (a) of the first section of the Clayton 
Act (15 U.S.C. 12(a)), except that such term includes the Act of June 
19, 1936 (49 Stat. 1526; 15 U.S.C. 13 et seq.), commonly known as the 
Robinson-Patman Act, and section 5 of the Federal Trade Commission Act 
(15 U.S.C. 45) to the extent that such section 5 applies to unfair 
methods of competition.

                    TITLE II--TRANSMISSION OPERATION

SEC. 201. OPEN ACCESS FOR ALL TRANSMITTING UTILITIES.

    (a) Open Access Transmission Authority.--Section 206 of the Federal 
Power Act is amended by adding the following new subsection after 
subsection (d):
    ``(e) Open Access Transmission Services.--
            ``(1) Public utilities.--Under section 205 and this 
        section, the Commission may, by rule or order, require public 
        utilities to provide transmission services on a not unduly 
        discriminatory or preferential basis, subject to section 
        212(h). This paragraph applies to any rule or order promulgated 
        by the Commission before, on, or after the date of enactment of 
        this subsection.
            ``(2) Transmitting utilities.--(A) Subject to section 
        212(h), the Commission may, by rule or order, require 
        transmitting utilities that are not public utilities (other 
        than the Federal power marketing administrations, the Tennessee 
        Valley Authority, and utilities to which section 212(k) 
        applies) to provide transmission services--
                    ``(i) at rates that are comparable to those each 
                such transmitting utility charges itself and that are 
                not unduly discriminatory or preferential, and
                    ``(ii) on terms and conditions (not relating to 
                rates) that are comparable to those required under 
                paragraph (1) for transmission service provided by 
                public utilities.
        In exercising its authority under this subparagraph, the 
        Commission may remand transmission rates to a transmitting 
        utility for review and revision where necessary. The Commission 
        may authorize recovery of wholesale stranded costs, as defined 
        by the Commission, arising from any requirement to provide 
        transmission service under this paragraph.
            ``(B)(i) Within 180 days after the date of enactment of 
        this subsection, after notice and opportunity for comment, the 
        Commission shall adopt rules providing criteria and procedures 
        to exempt certain transmitting utilities from subparagraph (A). 
        The Commission shall exempt from subparagraph (A) any 
        transmitting utility that is a small electric utility that does 
        not own or operate any transmission facilities that are part of 
        the bulk-power system, or that meets other criteria the 
        Commission determines to be in the public interest.
            ``(ii) The procedures established by the Commission shall 
        permit exemptions, after notice and opportunity for comment, 
        based on a letter application containing a sworn statement, by 
        a representative legally authorized to bind the applicant, 
        attesting to the facts demonstrating that the applicant meets 
        the exemption standards. A good faith application for an 
        exemption shall be deemed granted unless, within 60 days of its 
        receipt of such application, the Commission makes a 
        determination that the applicant does not meet the exemption 
        criteria.
            ``(iii) Upon complaint of any electric utility or 
        transmitting utility and after notice and opportunity for 
        comment, the Commission may revoke an exemption if it 
        determines the transmitting utility does not satisfy the 
        exemption criteria. In determining whether a transmitting 
        utility owns or operates transmission facilities that are part 
        of the bulk-power system, the Commission shall consider any 
        position taken by an electric reliability organization in the 
        region where the transmitting utility is located.
            ``(iv) For purposes of this subparagraph, the term `small 
        electric utility' means an electric utility that sells no more 
than 4,000,000 megawatt hours of electric energy per year; and the 
terms `bulk-power system', and `electric reliability organization' have 
the meanings given such terms in section 218(a).
            ``(3) Certain wholesale stranded costs.--The Commission 
        shall authorize recovery of wholesale stranded costs of a 
        public utility or transmitting utility that occur when retail 
        electric consumers cease to be served by that public utility or 
        transmitting utility by reason of the establishment of a local 
        distribution company owned or operated by a State or a 
        political subdivision of a State serving such consumers. In 
        calculating such wholesale stranded costs, the Commission shall 
        use a reasonable expectation period that is based on the 
        weighted average remaining useful life of generation assets 
        owned or power purchased under contract by the public utility 
        and included in wholesale or retail rates in effect on July 9, 
        1996. This paragraph shall apply to wholesale stranded cost 
        determinations made by the Commission before, on, or after the 
        date of enactment of this paragraph.''.
    (b) Retail Wheeling in Retail Competition States.--Section 212(h) 
of the Federal Power Act is amended as follows:
            (1) By inserting ``(1)'' before ``No''.
            (2) By striking ``(1)'', ``(2)'', ``(A)'', and ``(B)'' and 
        inserting in their places ``(A)'', ``(B)'', ``(i)'', and 
        ``(ii)'' respectively.
            (3) By striking from redesignated paragraph (1)(B)(ii) 
        ``the date of enactment of this subsection'' and inserting 
        ``October 24, 1992,''.
            (4) By adding the following new paragraph at the end:
    ``(2) Notwithstanding paragraph (1), the Commission may issue an 
order that requires the transmission of electric energy for purposes of 
a sale of such energy to retail electric consumers served by local 
distribution facilities that are subject to open access, consistent 
with State law.''.
    (c) Conforming Amendments.--(1) Section 211(a) of the Federal Power 
Act is amended by striking ``for resale''.
    (2) Section 212(a) of the Federal Power Act is amended by striking 
``wholesale'' each time it appears, except the last time.
    (d) Foreign Commerce.--(1) Section 201(c) of the Federal Power Act 
(16 U.S.C. 824(c)) is amended by striking ``thereof:'' and inserting 
``thereof (including consumption in a foreign country),''.
    (2) Section 202(f) of the Federal Power Act is repealed.

SEC. 202. REGIONAL TRANSMISSION ORGANIZATIONS.

    Section 202 of the Federal Power Act (16 U.S.C. 824a) is amended by 
adding the following new subsection after subsection (g):
    ``(h) Regional Transmission Organizations.--
            ``(1) Duty to participate.--The Commission is authorized 
        and directed to order each transmitting utility to participate 
        in a fully operational regional transmission organization not 
        later than 12 months after enactment of this subsection, 
        subject to the procedures and minimum standards established 
        under this subsection. Each transmitting utility that is not a 
        member of a fully operational regional transmission 
        organization (hereinafter in this subsection referred to as an 
        `RTO') approved by the Commission (pursuant to the Commission's 
        Order No. 2000) on the date of the enactment of this subsection 
        shall file with the Commission, within 3 months after such date 
        of enactment, an application to form or join an RTO. If a 
        transmitting utility fails to meet this deadline, the 
        Commission, in consultation with affected State regulatory 
        authorities, is authorized and directed to order such 
        transmitting utility to form or participate in an RTO that 
        meets the standards set forth in paragraph (6) not later than 9 
        months after the deadline. The Commission shall approve an 
        application submitted under this subsection if the Commission 
        determines that the RTO, including any independent transmission 
        company, proposed in the application meets the minimum 
        standards set forth in paragraph (6). If the Commission finds 
        that the RTO proposed in an application does not meet such 
        standards, the Commission, in consultation with affected State 
        regulatory authorities, shall propose such modifications or 
        conditions to the application as the Commission deems necessary 
        for the proposal to meet the minimum standards. The Commission 
        shall have no authority to mandate (whether directly or as a 
        condition of receiving or retaining any other regulatory 
        approval) the establishment of, participation in, or 
        modification to an RTO except as provided in this section.
            ``(2) Evidentiary hearing.--At the request of an applicant, 
        the Commission shall hold an evidentiary hearing to determine 
        whether the modifications or conditions the Commission would 
        impose on the applicant are necessary to meet the minimum 
        standards set forth in paragraph (6). A hearing held pursuant 
        to this section shall be subject to the procedural requirements 
        of the Federal Power Act, including the requirements of section 
        308 providing for interventions by interested parties.
            ``(3) Judicial review.--The applicant shall have a right of 
        review in the United States Court of Appeals for the District 
        of Columbia of an order imposing modifications or conditions on 
        an application to form or join an RTO. If the applicant 
        petitions the court for review, the RTO proceeding shall be 
        stayed until such time as the reviewing court renders its 
        decision. In establishing its docket, the Court shall expedite 
        the review of petitions brought under this paragraph. If the 
        reviewing court finds, after considering the evidentiary record 
        as a whole, that the Commission's decision is supported by a 
        preponderance of the evidence, the court shall uphold the 
        Commission's decision. If the reviewing court finds, after 
        considering the evidentiary record as a whole, that the 
        Commission's decision is not supported by a preponderance of 
        the evidence, the Commission shall order the applicant to 
participate in the RTO proposed by the applicant pursuant to paragraph 
(1), without modification.
            ``(4) Uniform market rules.--The term `market rules' means 
        rules establishing commercial procedures relating to the 
        provision of transmission services. The Commission is 
        authorized and directed, subject to the limitations on its 
        authority under this subsection, to ensure uniform market rules 
        (including establishment and enforcement of appropriate seams 
        agreements) such as are necessary and appropriate to achieve 
        the policy objectives of the Commission's Order No. 2000. 
        Nothing in this subsection shall interfere with the 
        Commission's authority to ensure uniform market rules through 
        its review of rates, terms and conditions under sections 205 
        and 206 of this Act. Such rules shall not have the effect of 
        requiring a transmitting utility to participate in a different 
        RTO or modifying the scope, configuration, or governance 
        structure of an RTO deemed to meet the standards of paragraph 
        (6). To implement the requirements of this paragraph, the 
        Commission shall issue a proposed rule within 3 months after 
        the enactment of this section.
            ``(5) Divestiture.--Nothing in this Act or any other Act 
        shall give the Commission authority to order the divestiture of 
        transmission facilities by any transmitting utility to a 
        regional transmission organization.
            ``(6) Standards for rtos.--The standards for regional 
        transmission organizations are as follows:
                    ``(A) Independence.--The RTO must be independent of 
                any market participant, pursuant to rules established 
                by the Commission. The RTO must include, as part of its 
                demonstration of independence, a demonstration that it 
                meets the following:
                            ``(i) The RTO, its employees, and any 
                        nonstakeholder directors must not have 
                        financial interests in any market participant.
                            ``(ii) The RTO must have a decision making 
                        process that is independent of control by any 
                        market participant or class of participants.
                            ``(iii) The RTO must have exclusive and 
                        independent authority under section 205 of this 
                        Act to propose rates, terms and conditions of 
                        transmission service provided over the 
                        facilities it operates. In the case of an RTO 
                        that does not own transmission, the 
                        transmission owners retain authority under 
                        section 206 to seek recovery from the RTO of 
                        the revenue requirements associated with the 
                        transmission facilities that they own.
                    ``(B) Scope and configuration.--The RTO must serve 
                an appropriate region. The region must be of sufficient 
                scope and configuration to permit the RTO to maintain 
                reliability, effectively perform its required 
                functions, and support efficient and nondiscriminatory 
                power markets, except that the RTO shall be deemed to 
                satisfy the requirements of this subparagraph if it is 
                structured so that all loads within the boundaries of 
                the RTO shall take service under the RTO's tariff and 
                it complies with either the cost and benefit test set 
                forth in clause (i) or the generation sufficiency test 
                set forth in clause (ii), respectively, of this 
                paragraph.
                            ``(i) Cost and benefit test.--The proposed 
                        RTO complies with the cost and benefit test if 
                        the expected benefits of the proposed scope and 
                        configuration of the RTO exceed the expected 
                        costs of implementing the RTO. The application 
                        shall include a cost and benefit analysis 
                        addressing the following factors:
                                    ``(I) efficient operation of 
                                wholesale markets;
                                    ``(II) effects on retail 
                                electricity rates in each of the 
                                affected States;
                                    ``(III) effects on attraction of 
                                investment capital to fund new 
                                transmission capacity needed for the 
                                RTO's efficient operation;
                                    ``(IV) costs previously incurred by 
                                RTO applicants in developing RTOs 
                                conditionally approved by the 
                                Commission prior to enactment of this 
                                Act; and
                                    ``(V) other costs and benefits 
                                related to RTO formation and 
                                participation.
                        The applicant's cost and benefit analysis shall 
                        be presumed to be sufficient to meet the 
                        requirements of this clause unless the 
                        Commission affirmatively finds by a 
                        preponderance of the evidence that the proposed 
                        scope and configuration does not meet such 
                        requirements.
                            (ii) Generation sufficiency test.--The 
                        proposed RTO complies with the generation 
                        sufficiency test if the RTO satisfies each of 
                        the following requirements:
                                    ``(I) The RTO has sufficient 
                                generation within the RTO's boundaries 
                                to serve the load within such 
                                boundaries.
                                    ``(II) The RTO is able to manage a 
                                substantial portion of all congestion 
                                of transmission facilities within its 
                                boundaries through market mechanisms 
                                without assistance from surrounding 
                                RTOs.
                                    ``(III) The RTO owns or has 
                                operational control over transmission 
                                facilities that serve at least 50,000 
                                Megawatts of load.
                    ``(C) Operational authority.--The regional 
                transmission organization shall have operational 
                authority for all transmission facilities under its 
                control.
                    ``(D) Reliability.--The regional transmission 
                organization shall have the exclusive authority for 
                maintaining the short-term reliability of the grid it 
                operates.
                    ``(E) Transmission service.--The regional 
                transmission organization shall be the sole provider of 
                transmission service and the sole administrator of a 
                tariff for all facilities under its control, provided 
                that nothing in this subsection shall preclude a public 
                utility from filing with the Commission original or 
                amended rates concerning transmission service on such 
                utility's facilities.
                    ``(F) Congestion management.--The regional 
                transmission organization shall agree to develop and 
                maintain market mechanisms to manage congestion.
                    ``(G) Parallel path flow.--The regional 
                transmission organization shall agree to develop and 
                implement procedures to address parallel path flows.
                    ``(H) Oasis, atc and ttc.--The regional 
                transmission organization shall operate a single Open 
Access Same Time Information System (OASIS) (as defined by the 
Commission) for all transmission facilities under its control, and 
shall calculate total transmission capacity (TTC) and available 
transmission capacity (ATC).
                    ``(I) Ancillary services.--The regional 
                transmission organization must serve as a supplier of 
                last resort for each of the following ancillary 
                services:
                            ``(i) Scheduling, System Control, and 
                        Dispatching Services; and
                            ``(ii) Reactive Supply and Voltage Control 
                        from Generation Services. For purposes of this 
                        subparagraph, the terms `Scheduling, System 
                        Control, and Dispatching Services' and 
                        `Reactive Supply and Voltage Control from 
                        Generation Services' shall be defined by the 
                        Commission.
                    ``(J) Market monitoring.--The RTO shall have a 
                market monitoring unit responsible for monitoring the 
                regional transmission organization's performance, 
                compliance with its Commission-approved tariff and 
                submission of market data to the Commission for review. 
                The market monitoring unit shall provide market 
                participants the opportunity to address any findings 
                and recommendations.
                    ``(K) Planning and expansion.--The regional 
                transmission organization shall develop plans for 
                enhancement and expansion of transmission facilities 
                within its area necessary to serve expected needs. The 
                regional transmission organization also shall have the 
                authority to review and approve all interconnections to 
                the transmission system to ensure that such 
                interconnections do not threaten the reliability of the 
                transmission system under the operational control of 
                the regional transmission organization and are not 
                determined in a discriminatory manner.
                    ``(L) Coordination.--The regional transmission 
                organization shall have in place provisions for inter-
                regional coordination, including seams arrangements 
                with neighboring regional transmission organizations.
            ``(6) Existing rtos.--The Commission shall have no 
        authority under this Act or any other law to require a 
        modification in the scope, configuration, corporate structure, 
        governance structure or other structural element of an RTO 
        finally approved without condition by the Commission (pursuant 
        to the Commission's Order No. 2000) before the date of 
        enactment of this subsection. This paragraph shall not be 
        construed to limit the Commission's authority to ensure uniform 
        market rules under paragraph (3).
            ``(7) Subsequent modification of rtos approved under this 
        section.--If, after final approval of an RTO under this 
        section, the Commission finds that the public interest requires 
        a modification to such RTO, the Commission shall propose such 
        modification. Such modification shall then be deemed a 
        modification or condition to that RTO's approved application 
        within the meaning of subsection (a) of this section and the 
        Commission shall have authority to mandate such modification 
        only subject to all procedures and standards of this section.
            ``(8) State authority not affected.--Nothing in this 
        section limits the authority of a State to address transmission 
        facility maintenance, planning, siting, and other utility 
        functions in a manner consistent with this Act or Commission 
        action under this Act. This subsection shall not apply to any 
        transmitting utility referred to in section 212(k)(2)(B).''.

                  TITLE III--TRANSMISSION RELIABILITY

 SEC. 301. ELECTRIC RELIABILITY.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended 
by inserting the following after section 215 as added by this Act:

``SEC. 216. ELECTRIC RELIABILITY.

    ``(a) Definitions.--For purposes of this section--
            ``(1) `bulk-power system' means the network of 
        interconnected transmission facilities and generating 
        facilities;
            ``(2) `electric reliability organization' means a self-
        regulating organization certified by the Commission under 
        subsection (c) whose purpose is to promote the reliability of 
        the bulk power system; and
            ``(3) `reliability standard' means a requirement to provide 
        for reliable operation of the bulk power system approved by the 
        Commission under this section.
    ``(b) Jurisdiction and Applicability.--The Commission shall have 
jurisdiction, within the United States, over an electric reliability 
organization, any regional entities, and all users, owners and 
operators of the bulk power system, including but not limited to the 
entities described in section 201(f), for purposes of approving 
reliability standards and enforcing compliance with this section. All 
users, owners and operators of the bulk-power system shall comply with 
reliability standards that take effect under this section.
    ``(c) Certification.--
            ``(1) The Commission shall issue a final rule to implement 
        the requirements of this section not later than 180 days after 
        enactment of this section.
            ``(2) Following the issuance of a Commission rule under 
        paragraph (1), any person may submit an application to the 
        Commission for certification as an electric reliability 
        organization. The Commission may certify an applicant if the 
        Commission determines that the applicant--
                    ``(A) has the ability to develop, implement, and 
                enforce reliability standards that provide for an 
                adequate level of reliability of the bulk-power system;
                    ``(B) has established rules that--
                            ``(i) assure its independence of the users 
                        and owners and operators of the bulk power 
                        system; while assuring fair stakeholder 
                        representation in the selection of its 
                        directors and balanced decision-making in any 
                        committee or subordinate organizational 
                        structure;
                            ``(ii) allocate equitably dues, fees, and 
                        other charges among end users;
                            ``(iii) provide fair and impartial 
                        procedures for enforcement of reliability 
                        standards through imposition of penalties 
                        (including limitations on activities, 
                        functions, or operations; or other appropriate 
                        sanctions); and
                            ``(iv) provide for reasonable notice and 
                        opportunity for public comment, due process, 
                        openness, and balance of interests in 
                        developing reliability standards and otherwise 
                        exercising its duties.
            ``(4) If the Commission receives two or more timely 
        applications that satisfy the requirements of this subsection, 
        the Commission shall approve only the application it concludes 
        will best implement the provisions of this section.
    ``(d) Reliability Standards.--
            ``(1) An electric reliability organization shall file a 
        proposed reliability standard or modification to a reliability 
        standard with the Commission.
            ``(2) The Commission may approve a proposed reliability 
        standard if it determines that the standard is just, 
        reasonable, not unduly discriminatory or preferential, and in 
        the public interest. The Commission shall give due weight to 
        the technical expertise of the electric reliability 
        organization with respect to the content of a proposed 
        standard, but shall not defer with respect to its effect on 
        competition.
            ``(3) The electric reliability organization and the 
        Commission shall rebuttably presume that a proposal from a 
        regional entity for a reliability standard to be applicable on 
        an Interconnection-wide basis is just, reasonable, not unduly 
        discriminatory or preferential and in the public interest.
            ``(4) The Commission shall remand to the electric 
        reliability organization for further consideration a proposed 
        reliability standard that the Commission disapproves in whole 
        or in part.
            ``(5) The Commission, upon its own motion or upon 
        complaint, may order an electric reliability organization to 
        submit to the Commission a proposed reliability standard or a 
        modification to a reliability standard that addresses a 
        specific matter if the Commission considers such a new or 
        modified reliability standard appropriate to carry out this 
        section.
    ``(e) Enforcement.--
            ``(1) An electric reliability organization may impose a 
        penalty on a user or owner or operator of the bulk power system 
        if the electric reliability organization, after notice and an 
        opportunity for a hearing--
                    ``(A) finds that the user or owner or operator of 
                the bulk power system has violated a reliability 
                standard approved by the Commission under subsection 
                (d); and
                    ``(B) filed notice with the Commission, which shall 
                affirm, set aside or modify the action.
            ``(2) On its own motion or upon complaint, the Commission 
        may order compliance with a reliability standard and may impose 
        a penalty against a user or owner or operator of the bulk power 
        system, if the Commission finds, after notice and opportunity 
        for a hearing, that the user or owner or operator of the bulk 
        power system has violated or threatens to violate a reliability 
        standard.
            ``(3) The Commission shall establish regulations 
        authorizing the electric reliability organization to enter into 
        an agreement to delegate authority to a regional entity for the 
        purpose of enforcing reliability standards if the agreement 
        satisfies applicable provisions of this section and promotes 
        effective and efficient administration of bulk power system 
        reliability, and may modify such delegation. The Commission 
        shall rebuttably presume that a proposal for delegation to a 
        regional entity organized on an interconnection-wide basis 
        promotes effective and efficient administration of bulk power 
        system reliability. Such regulation may provide that the 
        Commission may assign the electric reliability organization's 
        authority to enforce reliability standards directly to a 
        regional entity consistent with the requirements of this 
        paragraph.
            ``(4) The Commission may take such action as is necessary 
        or appropriate against the electric reliability organization or 
        regional entity to ensure compliance with a reliability 
        standard or any Commission order affecting the electric 
        reliability organization or regional entity.
    ``(f) Changes in Electricity Reliability Organization Rules.--An 
electric reliability organization shall file with the Commission for 
approval any proposed rule or proposed rule change, accompanied by an 
explanation of its basis and purpose. The Commission, upon its own 
motion or upon complaint, may propose a change to the rules of the 
electric reliability organization. A proposed rule or proposed rule 
change shall take effect upon a finding by the Commission, after notice 
and opportunity for comment, that the change is just, reasonable, not 
unduly discriminatory or preferential, is in the public interest, and 
satisfies the requirements of subsection (c)(2).
    ``(g) Coordination With Canada and Mexico.--
            ``(1) The electric reliability organization shall take all 
        appropriate steps to gain recognition in Canada and Mexico.
            ``(2) The President shall use his best efforts to enter 
        into international agreements with the governments of Canada 
        and Mexico to provide for effective compliance with reliability 
        standards and the effectiveness of the electric reliability 
        organization in the United States and Canada or Mexico.
    ``(h) Reliability Reports.--The electric reliability organization 
shall conduct periodic assessments of the reliability and adequacy of 
the interconnected bulk-power system in North America.
    ``(i) Savings Provisions.--(1) The electric reliability 
organization shall have authority to develop and enforce compliance 
with standards for the reliable operation of only the bulk-power 
system.
    ``(2) This section does not provide the electric reliability 
organization or the Commission with the authority to order the 
construction of additional generation or transmission capacity or to 
set and enforce compliance with standards for adequacy or safety of 
electric facilities or services.
    ``(3) Nothing in this section shall be construed to preempt any 
authority of any State to take action to ensure the safety, adequacy, 
and reliability of electric service within that State, as long as such 
action is not inconsistent with any organization standard.
    ``(4) Within 90 days of the application of the electric reliability 
organization or other affected party, and after notice and opportunity 
for comment, the Commission shall issue a final order determining 
whether a state action is inconsistent with an organization standard, 
taking into consideration any recommendations of the electric 
reliability organization.
    ``(5) The Commission, after consultation with the electric 
reliability organization, may stay the effectiveness of any state 
action, pending the Commission's issuance of a final order.
    ``(j) Application of Antitrust Laws.--
            ``(1) In general.--To the extent undertaken to develop, 
        implement, or enforce a reliability standard, each of the 
        following activities shall not, in any action under the 
        antitrust laws, be deemed illegal per se:
                    ``(A) activities undertaken by an electric 
                reliability organization under this section, and
                    ``(B) activities of a user or owner or operator of 
                the bulk power system undertaken in good faith under 
                the rules of an electric reliability organization.
            ``(2) Rule of reason.--In any action under the antitrust 
        laws, an activity described in paragraph (1) shall be judged on 
        the basis of its reasonableness, taking into account all 
        relevant factors affecting competition and reliability.
            ``(3) Definition.--For purposes of this subsection, 
        `antitrust laws' has the meaning given the term in subsection 
        (a) of the first section of the Clayton Act (15 U.S.C. 12(a)), 
        except that it includes section 5 of the Federal Trade 
        Commission Act (15 U.S.C. 45) to the extent that section 5 
        applies to unfair methods of competition.''.

                 TITLE IV--TRANSMISSION INFRASTRUCTURE

SEC. 401. SUSTAINABLE TRANSMISSION NETWORKS RULEMAKING.

    Part II of the Federal Power Act is amended by adding the following 
new section after section 215, as added by this Act:

``SEC. 216. SUSTAINABLE TRANSMISSION NETWORKS RULEMAKING.

    ``(a) Rulemaking Requirement.--Within 1 year after the enactment of 
this section, the Commission shall establish, by rule, transmission 
pricing policies and standards for promoting the expansion and 
improvement of interstate transmission networks through incentive-based 
and performance-based rate treatments and other means the Commission 
deems necessary or appropriate to ensure reliability of the electric 
system, to support interstate wholesale markets for electric power, and 
expand transmission capacity needed to sustain the growth of wholesale 
competition. Policies and standards established under this section 
shall specifically--
            ``(1) promote economically efficient enlargement of 
        transmission networks, including the provision of proper price 
        signals so that new generation and transmission is built where 
        it provides the lowest overall cost to consumers;
            ``(2) ensure consistency of gas pipeline pricing and 
        transmission pricing so as to ensure the proper economic 
        signals for generation location, use of alternative energy 
        sources, and for development of distributed generation;
            ``(3) encourage deployment of transmission technologies to 
        increase capacity of existing networks, including but not 
        limited to high-capacity wires, conductor and phase 
        improvements, power electronics and information technologies, 
        and high voltage direct current lines;
            ``(4) encourage deployment of transmission technologies to 
        reduce line losses;
            ``(5) provide a return on equity that causes needed 
        investment in transmission facilities to be made and reasonably 
        reflects the risks associated with changes in regulatory or 
        economic circumstances, including the financial, operational 
        and other risks of turning facilities over to a regional 
        transmission organization;
            ``(6) promote the voluntary participation in and formation 
        of regional transmission organizations;
            ``(7) reduce congestion on transmission networks;
            ``(8) allow for accelerated depreciation for transmission 
        equipment and facilities;
            ``(9) provide for innovative capital structures;
            ``(10) promote the implementation of environmentally sound 
        and other low-impact transmission design techniques and 
        facilities;
            ``(11) promote the efficient use of transmission systems on 
        a real-time basis, and
            ``(12) improve the reliability and security of transmission 
        networks.
    ``(b) Limitation on the Authority of This Section.--In the case of 
any transmission rate approved by the Commission on or after the 
effective date of the rule established under this section, the rate 
shall comply with--
            ``(1) the policies and standards adopted pursuant to this 
        section; and
            ``(2) the procedural and other requirements of this part, 
        including the requirement of sections 205 and 206, that all 
        rates, charges, terms and conditions be just and reasonable and 
        not unduly discriminatory.
    ``(c) Report.--Within 1 year of the issuance of the rule under this 
section, the Commission shall submit to Congress a report on all 
transmission pricing policies and standards adopted by the Commission 
to encourage the economic use and expansion of the transmission network 
through incentive rates or other similar market-oriented approaches 
consistent with subsection (a) of this section.
    ``(d) Annual Reports.--Beginning 1 year from enactment of this Act, 
the Commission shall submit annually a report to the Congress assessing 
the level of transmission investment in the preceding year and an 
assessment of the level and sufficiency of the Commission's allowed 
financial returns and other transmission pricing policies promoting 
economically efficient transmission investment by electric 
utilities.''.

SEC. 402. TRANSMISSION SITING.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended 
by inserting the following new section after section 216, as added by 
this Act:

``SEC. 217. FEDERAL TRANSMISSION SITING AUTHORITY.

    ``(a) Construction Permit.--The Commission shall approve, after 
notice and opportunity for hearing, a request of an entity for a permit 
to construct or modify transmission facilities if it makes each of the 
following findings:
            ``(1) A finding that--
                    ``(A) the State in which the transmission 
                facilities are to be constructed or modified is without 
                authority to approve the siting of the facilities, or
                    ``(B) a State commission or body in the State in 
                which the transmission facilities are to be constructed 
                or modified that has authority to approve the siting of 
                the facilities has withheld approval, conditioned its 
                approval in such a manner that the proposed 
                construction or modification is not economically 
                feasible, or delayed final approval for more than one 
                year after the filing of an application seeking 
                approval.
            ``(2) A finding that the facilities to be authorized by the 
        permit will be used for the transmission of electric energy in 
        interstate commerce.
            ``(3) A finding that the proposed construction or 
        modification is consistent with the public interest.
The Commission may include in a permit issued under this section 
conditions consistent with the public interest.
    ``(b) Permit Applications.--Permit applications under subsection 
(a) shall be made in writing to the Commission and verified under oath. 
The Commission shall issue rules setting forth the form of the 
application, the information it is to contain, and the manner of 
service of notice of the permit application upon interested persons.
    ``(c) Comments.--In any proceeding before the Commission under 
subsection (a), the Commission shall afford each State in which a 
transmission facility covered by the permit is or will be located, each 
affected Federal agency and Indian tribe, and other interested persons, 
a reasonable opportunity to present their views and recommendations 
with respect to the need for and impact of a facility covered by the 
permit.
    ``(d) Rights-of-Way.--If a holder of a permit issued by the 
Commission pursuant to subsection (a) cannot acquire by contract, or is 
unable to agree with the owner of the property to the compensation to 
be paid for, the necessary right-of-way to construct, operate, and 
maintain the transmission facility that is the subject of the permit, 
it may acquire the right-of-way by the exercise of the right of eminent 
domain in the district court of the United States for the district in 
which the property to be subject of the right-of-way is located, or in 
the appropriate court of the State in which the property is located. 
The practice and procedure in any action or proceeding for that purpose 
in the district court of the United States shall conform as nearly as 
practicable with the practice and procedure in similar action or 
proceeding in the courts of the State where the property is situated.
    ``(e) Cost Recovery.--All just and reasonable costs for the 
construction, operation, and maintenance of transmission facilities 
developed through a permit issued under subsection (a) shall be 
recoverable in rates for transmission services associated with these 
facilities.
    ``(f) State Law.--Nothing in this section shall preclude any person 
from constructing any transmission facilities pursuant to State law.
    ``(g) Compliance With Other Laws.--Commission action under this 
section shall be subject to the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.) and all other applicable Federal laws.''.

                       TITLE V--FEDERAL UTILITIES

                 Subtitle A--Tennessee Valley Authority

SEC. 501. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (2) The term ``distributor'' means a cooperative 
        organization, municipal or other publicly owned electric power 
        system which on December 31, 1997, purchased all or 
        substantially all of its wholesale power requirements from the 
        Tennessee Valley Authority pursuant to a long-term power sales 
        agreement.
            (3) The term ``distributor service area'' means the 
        geographic area within which a distributor is authorized by 
        State law to sell electric power to retail electric consumers.
            (4) The term ``electric utility'' has the same meaning as 
        provided by section 3(22) of the Federal Power Act (16 U.S.C. 
        796(22)).
            (5) The term ``excess electric power'' means that portion 
        of the electric power and capacity that is available to the 
        Tennessee Valley Authority and which exceeds the Tennessee 
        Valley Authority's power supply obligations to--
                    (A) distributors; and
                    (B) those Tennessee Valley Authority retail 
                electric consumers (or predecessor in interest) that 
                had a contract for the purchase of electric power from 
                the Tennessee Valley Authority on the date of enactment 
                of this Act.
            (6) The term ``public utility'' has the same meaning as 
        provided by section 201(e) of the Federal Power Act (16 U.S.C. 
        824(e)(1)).
            (7) The term ``retail electric consumer'' has the same 
        meaning as provided by section 3 of the Federal Power Act (16 
        U.S.C. 796).
            (8) The term ``Tennessee Valley Region'' means the 
        geographic area in which the Tennessee Valley Authority or its 
        distributors were the primary source of electric power on 
        December 31, 1997.

SEC. 502. WHOLESALE COMPETITION IN THE TENNESSEE VALLEY REGION.

    (a) Amendments to the Federal Power Act.--(1) Section 212(f) of the 
Federal Power Act (16 U.S.C. 824k(f)), relating to interconnection or 
wheeling orders that result in the sale or delivery of electric power 
outside the Tennessee Valley Region, is repealed.
    (2) Section 212(j) of the Federal Power Act (16 U.S.C. 824k(j)), 
relating to transmission within the Tennessee Valley Region, is 
repealed.
    (b) Amendments to the Tennessee Valley Authority Act.--(1) The 
third sentence of the first paragraph of section 15d(a) of the 
Tennessee Valley Authority Act of 1933 (16 U.S.C. 831n-4(a)), limiting 
the sale or delivery of electric power outside the area for which the 
Tennessee Valley Authority or its distributors were the primary source 
of electric power on July 1, 1957, is repealed.
    (2) The second and third paragraphs of section 15d(a) of the 
Tennessee Valley Authority Act of 1933 (16 U.S.C. 831n-4(a)) are 
repealed.

SEC. 503. TENNESSEE VALLEY AUTHORITY POWER SALES.

    (a) Limit on Retail Sales by Tennessee Valley Authority.--
Notwithstanding sections 10, 11, and 12 of the Tennessee Valley 
Authority Act of 1933 (16 U.S.C. 831i), the Tennessee Valley Authority 
shall not sell electric power at retail, except it may sell electric 
power to--
            (1) a retail electric consumer (or predecessor in interest) 
        that had a contract for the purchase of electric power from the 
        Tennessee Valley Authority on the date of enactment of this 
        Act; or
            (2) a retail electric consumer who consumes that electric 
        power within a distributor service area, if the applicable 
        regulatory authority (other than the Tennessee Valley 
        Authority) permits any other power supplier to sell electric 
        power to such retail electric consumer.
            (3) Construction of retail electric service facilities.--No 
        person shall construct or modify facilities in the service area 
        of a distributor for the purpose of serving a retail electric 
        consumer within the distributor service area without the 
        consent of such distributor, except when such electric consumer 
        is already being served by such person.
    (b) Wholesale Power Sales.--
            (1) Existing sales.--Nothing in this subtitle shall be 
        construed to modify or alter the existing obligations of the 
        Tennessee Valley Authority under the first sentence of section 
        10 of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 
        831i) to sell power to a distributor, except that, with respect 
        to a distributor which--
                    (A) has made a prior election under section 505(b); 
                and
                    (B) requests to increase its power purchases from 
                the Tennessee Valley Authority,
        this paragraph shall not apply to access by that distributor to 
        power being supplied by the Tennessee Valley Authority to 
        another entity under an existing contract with a term of 1 year 
        or longer.
            (2) Sales of excess electric power.--Notwithstanding 
        sections 10, 11, and 12, or any other provision of the 
        Tennessee Valley Authority Act of 1933 (16 U.S.C. 831 et seq.), 
        the sale of electric power at wholesale by the Tennessee Valley 
        Authority for use outside the Tennessee Valley Region shall be 
        limited to excess electric power. The Tennessee Valley 
        Authority shall not offer excess electric power under a firm 
        power agreement with a term of 3 years or longer to a new 
        wholesale customer at rates, terms, and conditions more 
        favorable than those offered to any distributor for comparable 
        electric power, taking into account such factors as the amount 
        of electric power sold, the firmness of such power, and the 
        length of the contract term, unless the distributor or 
        distributors that are purchasing electric power under 
        equivalent firm power contracts agree to the sale to the new 
        customer. Nothing in this subsection shall prevent the 
        Tennessee Valley Authority from making exchange power 
        arrangements with other electric utilities when economically 
        feasible.
    (d) Application of Tennessee Valley Authority Act to Sales Outside 
Tennessee Valley Region.--The third proviso of section 10 of the 
Tennessee Valley Authority Act of 1933 (16 U.S.C. 831i) and the second 
and third provisos of section 12 of the Tennessee Valley Authority Act 
of 1933 (16 U.S.C. 831k) shall not apply to any sale of excess electric 
power by the Tennessee Valley Authority for use outside the Tennessee 
Valley Region.

SEC. 504. TENNESSEE VALLEY AUTHORITY ELECTRIC GENERATION FACILITIES.

    (a) Generation Facilities.--Section 15d(a) of the Tennessee Valley 
Authority Act of 1933 (16 U.S.C. 831n-4(a)) is amended by striking the 
period at the end of the second sentence and inserting the following: 
``, if the Corporation determines that the construction, acquisition, 
enlargement, improvement, or replacement of any plant or facility used 
or to be used for the generation of electric power is necessary to 
supply the demands of distributors (as defined in section 501 of the 
Electric Supply and Transmission Act) and, to the extent permitted by 
section 503(a) of such Act, retail electric consumers of the 
Corporation.''.
    (b) Disclosure of Information.--Commencing on the date of enactment 
of this Act, the Tennessee Valley Authority shall provide distributors 
and their duly authorized representatives on a confidential basis 
detailed information on its projections and plans regarding the 
potential acquisition of new electric generating facilities and shall 
provide distributors an opportunity to provide comment, not less than 
45 days prior to a decision by the Tennessee Valley Authority to make 
such an acquisition. Any law to the contrary notwithstanding, such 
confidential information shall not be disclosed by distributor to 
sources other than the Tennessee Valley Authority, except--
            (1) in response to process validly issued by any court or 
        governmental agency having jurisdiction thereof;
            (2) to any officer, agent, employee, or duly authorized 
        representative of distributor who has agreed to the same 
        confidentiality and nondisclosure obligation applicable to 
        distributor;
            (3) in any judicial or administrative proceeding initiated 
        by distributor contesting action by the Tennessee Valley 
        Authority to cause the construction of new electric generation 
        facilities; or
            (4) 3 years following the commercial operating date of the 
        electric generating facilities.

SEC. 505. RENEGOTIATION OF POWER CONTRACTS.

    (a) Renegotiation.--Following the date of enactment of this Act, 
the Tennessee Valley Authority and the distributors shall make good 
faith efforts to renegotiate their existing power contracts.
    (b) Distributor Contract Termination or Reduction Right.--If a 
distributor and the Tennessee Valley Authority are unable by 
negotiation to arrive at a mutually acceptable replacement contract to 
govern the post-enactment relationship, then the Tennessee Valley 
Authority shall allow such distributor to give notice, which notice may 
be given once each calendar year and only within the 60-day period that 
follows either the date of enactment of this Act or any subsequent 
anniversary of the date of enactment of this Act--
            (1) to terminate the contract to purchase wholesale 
        electric energy from the Tennessee Valley Authority that was in 
        effect on the date of enactment, such termination to be 
        effective 3 years after the giving of such notice; or
            (2) to reduce the quantity of its wholesale power 
        requirements under the contract to purchase wholesale electric 
        energy from the Tennessee Valley Authority that was in effect 
        on the date of enactment by up to 10 percent of its 
        requirements, such reduction to be effective 2 years after the 
        giving of such notice, or by more than 10 percent of its 
        requirements, such reduction to be effective 3 years after the 
        giving of such notice, and to negotiate with the Tennessee 
        Valley Authority to adapt the contract that was in effect on 
        the date of enactment to reflect a partial requirements 
        relationship.
    (c) Partial Requirements Notice.--As part of any notice provided 
under subsection (b)(2), a distributor shall identify the annual 
quantity of electric energy which it will be acquiring from a source 
other than the Tennessee Valley Authority as the result of its election 
and times of the day and year that specified amounts of such energy 
will be received by the distributor.
    (d) Nondiscrimination.--The Tennessee Valley Authority shall not 
unduly discriminate against any distributor as the result of the 
exercise of notice under either subsection (b)(1) or subsection (b)(2) 
by such distributor or its status as a partial requirements customer.

SEC. 506. REGULATION OF TENNESSEE VALLEY AUTHORITY TRANSMISSION SYSTEM.

    Notwithstanding sections 201(b)(1) and 201(f) of the Federal Power 
Act, sections 205, 206, 208, and 210 through 213 and sections 301 
through 304, 306, 307 (except the last sentence of subsection (c)), 
308, 309, 313, and 317 of the Federal Power Act apply to the 
transmission and local distribution of electric power by the Tennessee 
Valley Authority to the same extent and in the same manner as such 
provisions apply to the transmission of electric power in interstate 
commerce by a public utility otherwise subject to the jurisdiction of 
the Commission under part II of such Act

SEC. 507. REGULATION OF TENNESSEE VALLEY AUTHORITY DISTRIBUTORS.

    (a) Election To Repeal Tennessee Valley Authority Regulation of 
Distributors.--Upon the election of a distributor, the third proviso of 
section 10 of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 
831i) and the second and third provisos of section 12 of the Tennessee 
Valley Authority Act of 1933 (16 U.S.C. 831k) shall not apply to 
wholesale sales of electric power by the Tennessee Valley Authority in 
the Tennessee Valley Region after the date of enactment of this Act, 
and the Tennessee Valley Authority shall not be authorized to regulate, 
by means of rules, contract provisions, resale rate schedules, contract 
termination rights, or any other method, any rates, terms, or 
conditions imposed on the resale of such electric power by such 
distributor, or any rates, terms, or conditions for the use of local 
distribution facilities.
    (b) Authority of Governing Bodies of Distributors.--Any regulatory 
authority exercised by the Tennessee Valley Authority over any 
distributor making an election authorized in subsection (a) shall be 
exercised by the governing body of such distributor, in accordance with 
the laws of the State in which it is organized. In the event a 
distributor does not make the election authorized in subsection (a), 
the provisions of the Tennessee Valley Authority Act specified in that 
subsection shall continue to apply for the duration of any wholesale 
power contract between the Tennessee Valley Authority and the 
distributor, according to its terms.
    (c) Use of Funds.--In any contract between the Tennessee Valley 
Authority and a distributor for the purchase of at least 70 percent of 
the distributor's requirements for the sale of electric power, the 
Tennessee Valley Authority shall include such terms and conditions as 
may be reasonably necessary to assure that the financial benefits of a 
distributor's electric system operations are allocated to the 
distributor's retail electric consumers.
    (d) Removal of PURPA Ratemaking Authority.--Section 3(17) of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2602(17)) is 
amended by striking ``, and in the case of an electric utility with 
respect to which the Tennessee Valley Authority has ratemaking 
authority, such term means the Tennessee Valley Authority''. 

SEC. 508. STRANDED COST RECOVERY.

    (a) Commission Jurisdiction.--The Tennessee Valley Authority may 
recover any wholesale stranded costs that may arise from the exercise 
of rights by a distributor pursuant to section 505 of this subtitle to 
the extent authorized by the Commission based on application of the 
rules and principles the Commission applies to wholesale stranded cost 
recovery by other electric utilities within its jurisdiction, provided 
that the Tennessee Valley Authority shall not be authorized to recover 
from any distributor any wholesale stranded costs related to loss of 
sales revenues by the Tennessee Valley Authority, or its expectation of 
continuing to sell electric energy, for any period after September 30, 
2007. The exercise of rights by a distributor under section 505 of this 
subtitle shall not affect a claim by the Tennessee Valley Authority 
that it may have for recovery of stranded costs prior to October 1, 
2007. This subsection shall apply notwithstanding the absence of 
provision addressing wholesale stranded cost recovery in a power sales 
agreement between the Tennessee Valley Authority and a distributor 
executed after the date of enactment of this Act.
    (b) Debt.--Stranded costs recovered by the Tennessee Valley 
Authority under subsection (a) shall be used to pay down the Tennessee 
Valley Authority's debt to the extent determined by the Tennessee 
Valley Authority to be consistent with proper financial management. The 
Tennessee Valley Authority may not use amounts recovered to pay for 
additions to the Tennessee Valley Authority's generation capacity.
    (c) Unbundling.--Any stranded cost recovery charge authorized by 
the Commission to be assessed by the Tennessee Valley Authority shall 
be unbundled from the otherwise applicable rates and charges to such 
customer and separately stated on the bill of such customer. The 
Tennessee Valley Authority shall not recover wholesale stranded costs 
from any customer through any other rate, charge, or mechanism.
    (d) Report.--Beginning in fiscal year 2001, as part of the annual 
management report submitted by the Tennessee Valley Authority to 
Congress, the Tennessee Valley Authority shall also specifically 
report--
            (1) the status of the Tennessee Valley Authority's long-
        range financial plans and the progress toward its goal of 
        competitively priced electric power, and a general discussion 
        of the Tennessee Valley Authority's prospects on meeting the 
        objectives of the Ten Year Business Outlook issued on July 22, 
        1997;
            (2) any changes in assumptions since the previous report 
        that may have a material effect on the Tennessee Valley 
        Authority's long-range financial plans;
            (3) the source of funds used for any generation and 
        transmission capacity additions;
            (4) the use or other disposition of amounts recovered by 
        the Tennessee Valley Authority under the Tennessee Valley 
        Authority Act and this subtitle;
            (5) the amount by which the Tennessee Valley Authority's 
        publicly held debt was reduced; and
            (6) the projected amount by which the Tennessee Valley 
        Authority's publicly held debt will be reduced.

SEC. 509. APPLICATION OF ANTITRUST LAW.

    (a) In General.--The Tennessee Valley Authority shall be subject to 
the antitrust laws of the United States with respect to the operation 
of its electric power and transmission systems. For purposes of this 
section, the term ``antitrust laws'' has the meaning given such term in 
subsection (a) of the first section of the Clayton Act (15 U.S.C. 
12(a)), except that such term includes section 5 of the Federal Trade 
Commission Act (15 U.S.C. 45) to the extent that such section 5 applies 
to unfair methods of competition.
    (b) Damages.--No damages, interest on damages, costs, or attorneys' 
fees may be recovered under section 4, 4A, or 4C of the Clayton Act (15 
U.S.C. 15, 15a, or 15c) from the Tennessee Valley Authority.
    (c) Association for Advocacy.--Nothing in this subtitle shall 
diminish or impair any privileges, immunities, or exemptions prior to 
enactment that would have been accorded any person by virtue of their 
association together in advocating their cause and points of view to 
the Tennessee Valley Authority or any other agency or branch of 
Federal, State, or local government.

SEC. 510. SAVINGS PROVISION.

    Nothing in this subtitle shall affect section 15d(b) of the 
Tennessee Valley Authority Act of 1933 (16 U.S.C. 831n-4(b)), providing 
that bonds issued by the Tennessee Valley Authority shall not be 
obligations of, nor shall payment of the principal thereof or interest 
thereon be guaranteed by, the United States.

                 Subtitle B--Bonneville Power Authority

SEC. 521. DEFINITIONS.

    As used in this subtitle:
            (1) The term ``Bonneville Administrator'' means the 
        Administrator of the Bonneville Power Administration.
            (2) The term ``Bonneville Transmission System'' means 
        transmission facilities owned or leased by the United States, 
        acting through the Bonneville Administrator, and operated by 
        the Bonneville Power Administration or operated by another 
        entity under section 523 of this subtitle.
            (3) The term ``Commission'' has the meaning given that term 
        in section 3 of the Federal Power Act (16 U.S.C. 796).
            (4) The term `Pacific Northwest' has the meaning given that 
        term in section 3(14) of the Pacific Northwest Electric Power 
        Planning and Conservation Act (16 U.S.C. 839a(14)).

SEC. 522. REGULATION OF BONNEVILLE TRANSMISSION SYSTEM.

    (a) In General.--After September 30, 2002, or the date the 
Bonneville Transmission System is participating in a regional 
transmission organization, whichever is earlier, notwithstanding 
section 201(f) of the Federal Power Act, sections 202(h), 205, 206, 
208, 210 through 213, 301 through 304, 306, 307 (except the last 
sentence of subsection (c)), 308, 309, 313, and 317 of that Act shall 
apply to the Bonneville Transmission System and the transmission of 
electric energy over the Bonneville Transmission System.
    (b) Transition Provision.--The Bonneville Administrator's 
transmission rates, terms, and conditions filed with the Commission 
prior to October 1, 2001, and approved by the Commission, shall 
continue in effect until superseded by rates, terms, and conditions 
that are filed with the Commission under this Act to be effective no 
later than October 1, 2003.
    (c) Additional Rules.--Any determination or approval by the 
Commission of rates, terms, and conditions for the transmission of 
electric energy under subsection (a) shall be subject to the following 
rules:
            (1) Phasing in changes in transmission rates or charges 
        that would cause unreasonable cost shifts among transmission 
        customers if implemented at once.
            (2) Mitigating unreasonable adverse effects on transmission 
        customers that would otherwise result from changes in the 
        historical treatment of costs to acquire transmission to serve 
        customers historically served by General Transfer Agreements 
        entered into between the Bonneville Administrator and other 
        utilities prior to the enactment of this Act.
            (3) No direct assignment of the costs of transmission 
        facilities that were included in the Bonneville Administrator's 
        rolled-in network transmission rates in effect on October 1, 
        2001, or of the costs for replacement of such facilities.
            (4) Assuring the transmission rates and charges are 
        established sufficient to--
                    (A) recover in a timely fashion the Federal 
                investment in the Bonneville Transmission System over a 
                reasonable number of years after first meeting all the 
                Bonneville Power Administrator other transmission costs 
                and expenses; and
                    (B) produce the revenues necessary to assure timely 
                payment of all transmission-related costs and expenses.
            (5) Costs and revenues shall be allocated to the Bonneville 
        Transmission System in accordance with rules to be promulgated 
        by the Commission.
            (6) Rules established by the Commission to--
                    (A) assure transmission access is provided over the 
                Bonneville Transmission System for hydroelectric power 
                that must be generated and transmitted at a particular 
                time in order to reduce levels of dissolved nitrogen 
                gas harmful to fish, with such access to be provided in 
                a manner that displaces the output of other generation 
                using the Bonneville Transmission System but does not 
                impair service to loads, require operations that may 
                damage generation facilities, or alter commercial 
                relationships between the power supplier whose 
                generation was displaced and its customer; and
                    (B) provide methods for compensation between or 
                among the hydroelectric power marketer and the party or 
                parties affected by the displacement.
    (d) Applicability.--Subsection (a) shall not apply to--
            (1) the Bonneville Power Administration's activities other 
        than transmission of electric energy over the Bonneville 
        Transmission System; or
            (2) a contract in effect on the date of enactment of this 
        Act, except for transmission rates which are adjustable by the 
        Bonneville Administrator under the contract; a treaty of the 
        United States; or a contract concerning the delivery of 
        electric energy and capacity entered into by entities 
        designated pursuant to such a treaty.
    (e) Priority of Payments.--Nothing in this section shall alter or 
be construed to alter the priority of payments established in section 
13(b) of the Federal Columbia River Transmission System Act (16 U.S.C. 
838k(b)) or the requirements of section 11 of that Act (16 U.S.C. 
838i).
    (f) Security.--(1) Notwithstanding any other law, any statutory and 
other authorities in effect on October 1, 1998, of the Bonneville 
Administrator to establish, and of the Commission to confirm and 
approve, a surcharge on rates or charges for transmission services over 
the Bonneville Transmission System for the recovery of costs that--
            (A) relate to any generation or conservation resources 
        financed by debt issued by a non-Federal party before October 
        1, 1998 (and any refundings and refinancings thereof),
            (B) are secured by an obligation of the Bonneville 
        Administrator to make payments or net bill power and 
        transmission service, and
            (C) cannot be timely recovered through power rates and 
        charges and paid in accordance with the application of revenues 
        and priority of payments specified by section 13(b) of the 
        Federal Columbia River Transmission System Act of 1974 (16 
        U.S.C. 838k(b)), shall continue in full force and effect for 
        the purposes of such recovery.
Recovery of such costs shall be allowed only to the extent that it 
would have been allowed under laws applicable to the Bonneville 
Administrator as of October 1, 1998. In reviewing the Administrator's 
filing of a surcharge under this paragraph, the Commission shall apply 
the standard of review applicable as of October 1, 1998.
    (2) Any amount recovered through any transmission surcharge under 
paragraph (1) shall be treated as a loan to the Bonneville Power 
Administration's power function from the transmission function and 
shall bear interest at a rate determined appropriate by the Commission. 
The Bonneville Power Administration's power function shall repay the 
loans as soon as reasonably possible after the Bonneville Administrator 
determines that power revenues are sufficient to meet the 
Administrator's other power cost recovery and Treasury repayment 
obligations on an annual basis. To the extent reasonably practicable, 
the Administrator shall refund all or a portion of the surcharge 
collected from transmission customers with a higher priority of payment 
accorded those transmission customers that purchased no or a lesser 
amount of power from the Bonneville Power Administration in the 5 years 
prior to the effective date of the surcharge as directed and determined 
appropriate by the Commission.
    (g) Hearings.--Any proceeding to approve or fix transmission rates 
and charges pursuant to this part shall be conducted in the Pacific 
Northwest.

SEC. 523. AUTHORITY OF ADMINISTRATOR TO PARTICIPATE IN REGIONAL 
              TRANSMISSION ORGANIZATION.

    Notwithstanding any other provision of law, the Bonneville 
Administrator is authorized to make contractual and other arrangements 
for the transfer of control and use of the Bonneville Transmission 
System to a regional transmission organization comprised of all or part 
of the geographic areas specified in FERC Docket RTO-35-000, filed on 
October 15, 2000, that meets or proposes to meet the minimum 
characteristics and functions of a regional transmission organization 
required by the Commission. The Administrator's contracts and other 
arrangements for participation shall set forth terms and conditions the 
Administrator determines are necessary or appropriate, and shall 
include terms that assure the recovery of all the Administrator's 
transmission costs and expenses, and consistency with the 
Administrator's existing contracts and existing third-party financing 
obligations. The contracts for participation may provide for the 
resolution of disputes through arbitration or other means with the 
entity or with other participants. The Bonneville Administrator shall 
maintain effective oversight of the regional transmission 
organization's fulfillment of the contractual and other terms and 
conditions required by the Administrator, and shall maintain the 
ability to terminate the Bonneville Transmission System's participation 
in the regional transmission organization if the organization fails to 
materially satisfy those terms and conditions. The statutory 
authorities and duties of the Secretary of Energy and the Bonneville 
Administrator with respect to the Bonneville Transmission System shall 
be suspended for the period of the contract of participation, including 
extensions or renewals thereof, insofar as they are to be 
accomplished through the Administrator's contracts and other 
arrangements for participation, and except for those matters that the 
Administrator determines are not to be fulfilled by the regional 
transmission organization.

SEC. 524. LIMITATION ON RETAIL SERVICES.

    Notwithstanding section 5(a) of the Bonneville Project Act (16 
U.S.C. 823d(a)), the Administrator shall not sell electric energy or 
capacity to any consumer, except for any consumer that did have a 
contract for purchase of electric energy from the Bonneville Power 
Administration for use at specific facilities on October 1, 2001. This 
restriction shall not apply to sales to a Federal agency or to an 
assignee, subsidiary, affiliate, or successor in interest, whether 
through sale, transfer or otherwise, of a consumer that did have a 
contract for purchase of electric energy from the Bonneville Power 
Administration for use at specific facilities on October 1, 2001. For 
purposes of this section, the term ``consumer'' has the meaning given 
such term in section 3(5) of the Pacific Northwest Electric Power 
Planning and Conservation Act (16 U.S.C. 839a(5)).

SEC. 525. DIRECT SERVICE INDUSTRIES.

    The Administrator of the Bonneville Power Administration shall 
negotiate power sales contracts with all willing Northwest aluminum 
direct service industrial customers beyond the term of currently 
effective BPA power supply contracts. The Secretary of Energy or his 
designee within the Department of Energy shall review the terms of such 
negotiated contracts and ensure that they provide for continued access 
to a reasonable level of federal firm power, at a rate established 
under 16 U.S.C. 839e(c), that will enable such customers to operate 
their facilities in the Pacific Northwest in an economic manner for the 
long term.

SEC. 526. CONFORMING AMENDMENTS.

    (a) Federal Power Act.--(1) Section 212(i) of the Federal Power Act 
(16 U.S.C. 824(i)) is repealed.
    (2) Section 306 of the Federal Power Act is amended by inserting 
``agency or instrumentality of the United States,'' after ``person'' in 
the first sentence.
    (3) Section 313 of the Federal Power Act is amended by inserting 
``agency or instrumentality of the United States,'' after ``person,'' 
in the first sentence.
    (b) Federal Columbia River Transmission System Act.--(1) Section 
3(c) of the Federal Columbia River Transmission System Act (16 U.S.C. 
838a(c)) is amended by inserting ``, and transmission facilities with 
an estimated capital cost exceeding $50,000,000 in 1998 dollars, 
adjusted using the United States Gross Domestic Product Implicit Price 
Deflator Index'', after ``own facilities''.
    (2) Section 6 of the Federal Columbia River Transmission System Act 
(16 U.S.C. 838d) is repealed.
    (3) Section 9 of the Federal Columbia River Transmission System Act 
(16 U.S.C. 838g) is amended to read as follows:

``SEC. 9. RATES AND CHARGES.

    ``Schedules of rates and charges for the sale, including 
dispositions to Federal agencies, of all electric power made available 
to the Administrator pursuant to section 8 of this Act or otherwise 
acquired shall be established--
            ``(1) with a view to encouraging the widest possible 
        diversified use of electric power at the lowest possible rates 
        to consumers consistent with sound business principles;
            ``(2) having regard to the recovery (upon the basis of the 
        application of such rate schedules to the capacity of the 
        electric facilities of the projects) of the cost of producing 
        such electric power, including the amortization of the capital 
        investment allocated to power over a reasonable period of years 
        and payments provided for in section 11(b)(9) of this Act; and
            ``(3) at levels to produce such additional power revenues 
        as may be required, in the aggregate with all other power 
        revenues of the Administrator, to pay when due--
                    ``(A) the principal of, premiums, discounts, and 
                expenses in connection with the issuance of and 
                interest on all bonds issued and outstanding pursuant 
                to this Act for all actions other than the 
                construction, acquisition, and replacement of the 
                Federal transmission system; and
                    ``(B) amounts required to establish and maintain 
                reserve and other funds and accounts established in 
                connection therewith.
Electric power rates under this section shall be established by the 
Administrator in accordance with section 7 of the Pacific Northwest 
Electric Power Planning and Conservation Act.''.
    (4) Section 10 of the Federal Columbia River Transmission System 
Act (16 U.S.C. 838h) is repealed.
    (c) Regional Preference Act.--Section 6 of Public Law 88-552 (16 
U.S.C. 837e), commonly known as the ``Regional Preference Act'', is 
amended by striking ``Federal energy or'' in the first sentence and by 
striking the second sentence.
    (d) Northwest Power Act.--(1) Section 7(a)(1) of the Pacific 
Northwest Electric Power Planning and Conservation Act (16 U.S.C. 
839e(a)(1)) is amended to read as follows:
    ``(1) The Administrator shall establish, and periodically review 
and revise, rates for the sale and disposition of electric power and 
shall periodically review and, if necessary, propose revisions to rates 
for the transmission of electric power. Rates for the sale and 
disposition of electric power shall be established and, as appropriate, 
revised to recover, in accordance with sound business principles, the 
costs associated with the acquisition and conservation of electric 
power, including the amortization of the Federal investment in the 
Federal Columbia River Power System that is allocable to electric power 
rates (including irrigation costs required to be repaid out of electric 
power revenues) over a reasonable period of years and the other costs 
and expenses incurred by the Administrator pursuant to this Act and 
other provisions of law. Rates for the sale and disposition of electric 
power shall be established in accordance with section 9 of the Federal 
Columbia River Transmission System Act (16 U.S.C. 838g), section 5 of 
the Flood Control Act of 1944 (16 U.S.C. 825s), and this Act.''.
    (2) Section 7(a)(2) of the Pacific Northwest Electric Power 
Planning and Conservation Act (16 U.S.C. 839e(a)(2)) is amended as 
follows:
            (A) By striking ``Rates'' and inserting ``Power rates''.
            (B) By inserting ``and'' after the comma in subparagraph 
        (A).
            (C) By striking ``, and'' and inserting a period at the end 
        of subparagraph (B).
            (D) By striking subparagraph (C).
    (3) Section 7(i) of the Pacific Northwest Electric Power Planning 
and Conservation Act (16 U.S.C. 839e(i)) is amended by inserting 
``power'' after ``establishing'' in the first sentence.
    (4) Section 9(d) of the Pacific Northwest Electric Power Planning 
and Conservation Act (16 U.S.C. 839f(d)) is amended by striking 
``transmission access,'' and inserting ``power'' before ``services'' in 
the second sentence.
    (5) Section 9(i)(3) of the Pacific Northwest Electric Power 
Planning and Conservation Act (16 U.S.C. 839f(i)(3)) is amended by 
inserting ``power'' before ``services'' each place it appears, and by 
striking ``transmission,'' in the first sentence.
    (e) Bonneville Project Act.--Section 2(e) of the Bonneville Project 
Act (16 U.S.C. 832a(e)) is amended by striking the colon and all that 
follows and inserting a period.

       Subtitle C--Other Federal Power Marketing Administrations

SEC. 531. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``Administrator'' means the administrator of a 
        Federal power marketing administration.
            (2) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (3) The term ``Federal power marketing administrations'' 
        means the Western Area Power Administration, Southwestern Power 
        Administration, and Southeastern Power Administration.
            (4) The term ``power generating agencies'' means the Bureau 
        of Reclamation, the Army Corps of Engineers, and the 
        International Boundary and Water Commission.
            (5) The term ``public utility'' means a public utility as 
        defined in section 201(e) of the Federal Power Act.

SEC. 532. WHOLESALE POWER SALES BY FEDERAL POWER MARKETING 
              ADMINISTRATIONS.

    (a) Rates, Terms, and Conditions.--(1) All rates and charges made, 
demanded, or received for the sale of electric energy and capacity by 
each Federal power marketing administration to its electric energy 
customers shall be the lowest possible rates and charges that will 
recover from such customers over a reasonable period of years, in 
accordance with sound business principles, all costs incurred by the 
United States for the production of electric energy sold by such 
Federal power marketing administration, including repayment of the 
capital investment allocated to power and costs assigned by Acts of 
Congress to power for repayment.
    (2) The Commission may modify proposed rates submitted by any 
Federal power marketing administration and establish terms and 
conditions consistent with this subsection. In its determination of 
rates, terms, and conditions for the sale of electric energy and 
capacity by the Federal power marketing administrations the Commission 
shall not review policy judgments and interpretations of laws and 
regulations made by the power generating agencies.
    (b) Existing Rates.--All rates, terms, and conditions for the sale 
of electric energy and capacity by the Federal power marketing 
administrations placed into effect on a final basis prior to the date 
of enactment of this Act shall remain in full force and effect unless 
the Commission determines, after a hearing held upon its own motion or 
upon complaint, that the rates, terms, and conditions are inconsistent 
with subsection (a)(1) and establishes new rates, terms, and 
conditions.
    (c) Periodic Review.--The Administrators shall periodically review 
the rates and charges made, demanded, or received by each Federal power 
marketing administration for the sale of electric energy and capacity. 
In the event the rates and charges made, demanded, or received by any 
Federal power marketing administration are inconsistent with subsection 
(a)(1), the Administrator of that administration shall propose revised 
rates. Such rates shall be established in accordance with this section, 
section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s), section 
9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)), and 
the Acts specifically applicable to individual projects of the power 
systems of the power generating agencies.

SEC. 533. REGULATION OF FEDERAL POWER MARKETING ADMINISTRATION 
              TRANSMISSION SYSTEMS.

    Notwithstanding section 201(f) of the Federal Power Act, sections 
202(h), 205, 206, 208, and 210 through 213 and sections 301 through 
304, 306, 307 (except the last sentence of paragraph (c)), 308, 309, 
313, and 317 of the Federal Power Act apply to the transmission of 
electric energy by the Federal power marketing administrations to the 
same extent and in the same manner as such provisions apply to the 
transmission of electric energy in interstate commerce by a public 
utility otherwise subject to the jurisdiction of the Commission under 
part II of such Act.

SEC. 534. ACCOUNTING.

    Not later than six months after the date of enactment of this Act, 
the Commission shall promulgate rules containing each of the following:
            (1) Accounting principles and requirements.--Procedures to 
        ensure that the Federal power marketing administrations utilize 
        the same accounting principles and requirements as are 
        applicable to public utilities pursuant to parts II and III of 
        the Federal Power Act (16 U.S.C. 792 and following) with 
        respect to accounting for revenue, expenses, investments, and 
        depreciation.
            (2) Compliance.--Procedures for the filing of complaints 
        with the Commission by interested persons seeking to ensure 
        compliance with the procedures of this section.
            (3) Administrative reconciliation.--Procedures to ensure 
        that the power generating agencies and the Administrators 
maintain a consistent set of books and records for purposes of 
repayment obligations.

SEC. 535. APPLICATION OF ANTITRUST LAW.

    (a) In General.--Each Federal power marketing administration shall 
be subject to the antitrust laws of the United States with respect to 
its sale of electric energy and capacity and the operation of its 
transmission system. For purposes of this section, the term ``antitrust 
laws'' has the meaning given such term in subsection (a) of the first 
section of the Clayton Act (15 U.S.C. 12(a)), except that such term 
includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45) 
to the extent that such section 5 applies to unfair methods of 
competition.
    (b) Damages.--No damages, interest on damages, costs, or attorney's 
fees may be recovered under section 4, 4A, or 4C of the Clayton Act (15 
U.S.C. 15, 15a, or 15c) from a Federal power marketing administration.

                     TITLE VI--CONSUMER PROTECTIONS

SEC. 601. ELECTRIC SUPPLY UNFAIR TRADE PRACTICES.

    (a) Slamming.--(1) The Federal Trade Commission may promulgate 
rules in accordance with section 553 of title 5 of the United States 
Code for the submittal and verification of a retail electric consumer's 
selection or change in selection of a retail electric supplier and for 
the assessment of penalties for violation of these rules.
    (2) A person shall not submit or change the selection made by a 
retail electric consumer if prohibited by law or Federal Trade 
Commission rules established under paragraph (1).
    (3) It shall be unlawful for any person to change the retail 
electric supplier without the consent of the retail electric consumer.
    (b) Cramming.--(1) The Federal Trade Commission may promulgate 
rules in accordance with section 553 of title 5 of the United States 
Code for obtaining the consent of a retail electric consumer for 
purchase of goods and services other than those expressly authorized by 
law or any agreement for the purchase of electric energy or related 
services entered into by the electric consumer and for the assessment 
of penalties for violation of these rules.
    (2) A person shall not charge a retail electric consumer for a 
particular good or service if such submission or change is prohibited 
by law or Federal Trade Commission rules established under paragraph 
(1).
    (3) It shall be unlawful for any person to charge a retail electric 
consumer for electric energy or related services unless expressly 
authorized by law or by agreement for the purchase of electric energy 
or related services entered into by the electric consumer.
    (c) Federal Trade Commission Enforcement.--Violation of a rule 
promulgated under this section shall be treated as a violation of a 
rule under section 18 of the Federal Trade Commission Act (15 U.S.C. 
57a) regarding unfair and deceptive acts or practices. All functions 
and powers of the Federal Trade Commission under such Act are available 
to the Federal Trade Commission to enforce compliance with this section 
notwithstanding any jurisdictional limitations in such Act.
    (d) State Authority.--(1) This section does not preclude a State or 
State commission from prescribing and enforcing additional laws, 
regulations, or procedures regarding the practices which are the 
subject of this section, so long as such laws, regulations, or 
procedures are not inconsistent with the provisions of this section or 
with any rule prescribed by the Federal Trade Commission pursuant to 
it.
    (2) If the Federal Trade Commission determines that a State's 
regulations provide equivalent or greater protection than the 
provisions of this section, such State regulations shall apply in that 
State in lieu of the regulations issued by the Commission under this 
section.
    (e) Other Remedies.--The remedies provided by this section are in 
addition to any other remedies available by law.
    (f) Enforcement by States.--(1) Whenever an attorney general of any 
State has reason to believe that the interests of the residents of that 
State have been or are being threatened or adversely affected because 
any person has engaged or is engaging in a pattern or practice which 
violates any rule of the Commission under this section or section 602, 
the State, as parens patriae, may bring a civil action on behalf of its 
residents in an appropriate district court of the United States to 
enjoin such violation, to enforce compliance with such rule of the 
Commission, to obtain damages, restitution, or other compensation on 
behalf of residents of such State, or to obtain such further and other 
relief as the court may deem appropriate.
    (2) The State shall serve prior written notice of any civil action 
under paragraph (1) or paragraph (6)(B) of this subsection upon the 
Commission and provide the Commission with a copy of its complaint, 
except that if it is not feasible for the State to provide such prior 
notice, the State shall serve such notice immediately upon instituting 
such action. Upon receiving a notice respecting a civil action, the 
Commission shall have the right--
            (A) to intervene in such action,
            (B) upon so intervening, to be heard on all matters arising 
        therein, and
            (C) to file petitions for appeal.
    (3) For purposes of bringing any civil action under paragraph (1) 
of this subsection, nothing in this chapter shall prevent an attorney 
general from exercising the powers conferred on the attorney general by 
the laws of such State to conduct investigations or to administer oaths 
or affirmations or to compel the attendance of witnesses or the 
production of documentary and other evidence.
    (4) Whenever a civil action has been instituted by or on behalf of 
the Commission for violation of any rule prescribed under this section 
or section 602, no State may, during the pendency of such action 
instituted by or on behalf of the Commission, institute a civil action 
under paragraph (1) or paragraph (6)(B) of this subsection against any 
defendant named in the complaint in such action for violation of any 
rule as alleged in such complaint.
    (5) Any civil action brought under paragraph (1) of this subsection 
in a district court of the United States may be brought in the district 
in which the defendant is found, is an inhabitant, or transacts 
business or wherever venue is proper under section 1391 of title 28 of 
the United States Code. Process in such an action may be served in any 
district in which the defendant is an inhabitant or in which the 
defendant may be found.
    (6)(A) Nothing contained in this subsection shall prohibit an 
authorized State official from proceeding in State court on the basis 
of an alleged violation of any civil or criminal statute of such State.
    (B) In addition to actions brought by an attorney general of a 
State under paragraph (1) of this subsection, such an action may be 
brought by officers of such State who are authorized by the State to 
bring actions in such State on behalf of its residents.

SEC. 602. CONSUMER PRIVACY.

    (a) Prohibition.--The Federal Trade Commission may promulgate rules 
regarding the disclosure of or access to consumer information in 
connection with the sale or delivery of electric energy to a retail 
electric consumer. Such rules shall be promulgated in accordance with 
section 553 of title 5 of the United States Code.
    (b) Permitted Use.--The rules under subsection (a) shall not 
prohibit any person from using, disclosing, or permitting access to 
consumer information referred to in subsection (a) for any of the 
following purposes:
            (1) To facilitate a retail electric consumer's change in 
        selection of a retail electric supplier under procedures 
        approved by the State or State commission.
            (2) To initiate, render, bill, or collect for the sale or 
        delivery of electric energy to retail electric consumers or for 
        related services.
            (3) To protect the rights or property of the person 
        obtaining such information.
            (4) To protect retail electric consumers from fraud, abuse, 
        and unlawful subscription in the sale or delivery of electric 
        energy to such consumers.
            (5) For law enforcement purposes.
            (6) For purposes of compliance with any Federal, State, or 
        local law or regulation authorizing disclosure of information 
        to a Federal, State, or local agency.
    (c) Aggregate Consumer Information.--The rules under subsection (a) 
shall permit any person to use, disclose, and permit access to 
aggregate consumer information and shall require local distribution 
companies to make such information available to retail electric 
suppliers upon request and payment of a reasonable fee.
    (d) Federal Trade Commission Enforcement.--Violation of a rule 
promulgated under this section shall be treated as a violation of a 
rule under section 18 of the Federal Trade Commission Act (15 U.S.C. 
57a) regarding unfair and deceptive acts or practices. All functions 
and powers of the Federal Trade Commission under such Act are available 
to the Federal Trade Commission to enforce compliance with this section 
notwithstanding any jurisdictional limitations in such Act.
    (e) State Authority.--(1) If the Federal Trade Commission 
determines that a State's regulations provide equivalent or greater 
protection than the provisions of this section, such State regulations 
shall apply in that State in lieu of the regulations issued by the 
Commission under this section.
    (2) The remedies provided by this section are in addition to any 
other remedies available by law.
    (f) Definitions.--As used in this section:
            (1) Aggregate consumer information.--The term ``aggregate 
        consumer information'' means collective data that relates to a 
        group or category of retail electric consumers, from which 
        individual consumer identities and characteristics have been 
        removed.
            (2) Consumer information.--The term ``consumer 
        information'' means information that relates to the electric 
        energy delivered to any retail electric consumer.

SEC. 603. AGGREGATION.

    Part II of the Federal Power Act (16 U.S.C. 824 and following) is 
amended by adding the following new section after section 217, as added 
by this Act:

``SEC. 218. PURCHASE OF ELECTRIC ENERGY BY RETAIL ELECTRIC CONSUMERS.

    ``Subject to not unduly discriminatory or preferential State 
requirements, each retail electric consumer may designate any entity 
that aggregates consumers to negotiate on the consumer's behalf the 
purchase of retail electric energy on an aggregate basis if the 
consumer is served by a local distribution company whose local 
distribution facilities are subject to open access, and no State may 
prohibit any political subdivision of a State or any electric 
cooperative from serving as an entity that aggregates consumers, if 
such entity provides open access to any local distribution facilities 
it may own or operate.''.

SEC. 604. STATE PUBLIC PURPOSE CHARGES.

    Section 201(b) of the Federal Power Act is amended by adding the 
following new paragraph after paragraph (3):
    ``(4) This Act shall not affect the authority of a State or 
municipality to require as a charge for delivery of electric energy to, 
or as a condition for the purchase or receipt of electric energy by, 
any retail electric consumer located in such State the payment of any 
charge deemed necessary by such State or municipality for any purpose, 
including any of the following:
            ``(A) To recover transition costs.
            ``(B) To ensure that adequate electric service is available 
        to all retail electric consumers served by a local distribution 
        company.
            ``(C) To ensure and enhance the reliability of retail 
        electric service.
            ``(D) To fund assistance to low-income retail electric 
        consumers.
            ``(E) To encourage environmental, emerging energy 
        technology, energy efficiency, or energy conservation programs.
            ``(F) To provide for transition costs of electric utility 
        workers.
Nothing in this paragraph shall require a State or municipality to 
impose any such charges.''.

SEC. 605. STATE AUTHORITY TO ORDER RETAIL ELECTRIC COMPETITION.

    Section 201(b) of the Federal Power Act is amended by adding the 
following new paragraph after paragraph (2):
    ``(3) This Act shall not affect the authority of a State or 
municipality to require retail electric competition or to require the 
unbundling of transmission and local distribution service for the 
delivery of electric energy directly to a retail electric consumer.''.

SEC. 606. UNIVERSAL AND AFFORDABLE SERVICE.

    It is the sense of the Congress that--
            (1) every retail electric consumer should have access to 
        electric energy at reasonable and affordable rates; and
            (2) the States should ensure that retail electric 
        competition does not result in the loss of service to rural, 
        residential, or low-income consumers.

   TITLE VII--INVESTIGATION AND CORRECTION OF ANTICOMPETITIVE CONDUCT

SEC. 701. UNIFORM INVESTIGATION AUTHORITY.

    Section 307(a) of the Federal Power Act (16 U.S.C. 825f(a)) is 
amended as follows:
            (1) By inserting ``electric utility, or transmitting 
        utility'' after ``person'' each time it appears.
            (2) By striking the period at the end of the first sentence 
        and inserting the following: ``or in obtaining information 
        about the sale of electric energy at wholesale in interstate 
        commerce and the transmission of electric energy in interstate 
        commerce.''.

SEC. 702. UNIFORM FERC REFUND AUTHORITY.

    (a) Scope of Authority.--Section 206 of the Federal Power Act (16 
U.S.C. 824e) is amended as follows:
            (1) In subsection (a), strike ``public utility for any 
        transmission or sale subject to'' and insert ``entity for any 
        transmission or sale by or to a public utility subject to''.
            (2) In subsection (b), in the seventh sentence, strike 
        ``the public utility to make''.
    (b) Conforming Amendments.--Section 201(b)(2) of such Act (16 
U.S.C. 824(b)(2)) is amended as follows:
            (1) In the first sentence, strike ``The provisions of 
        section 210'' and insert ``Notwithstanding subsection (f), the 
        provisions of section 206, 210''.
            (2) In the second sentence strike ``section 210'' and 
        insert ``section 206, 210''.

SEC. 703. CRIMINAL AND CIVIL PENALTIES.

    (a) Criminal Penalties.--(1) Section 316(a) of the Federal Power 
Act (16 U.S.C. 825o(a)) is amended by striking ``$5,000'' and inserting 
``$1,000,000'', and by striking ``two years'' and inserting ``five 
years'';
    (2) Section 316(b) of the Federal Power Act (16 U.S.C. 825o(b)) is 
amended by striking ``$500'' and inserting ``$25,000''.
    (b) Civil Penalties.--Subsections (a) and (b) of section 316A of 
the Federal Power Act (16 U.S.C. 825o-1) are amended by striking 
``section 211, 212, 213, or 214'' each place it appears and inserting 
``part II''.
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