[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 172 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 172
To benefit electricity consumers by promoting the reliability of the
bulk-power system.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 24, 2001
Mr. Smith of Oregon introduced the following bill; which was read twice
and referred to the Committee on Energy and Natural Resources
_______________________________________________________________________
A BILL
To benefit electricity consumers by promoting the reliability of the
bulk-power system.
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 Reliability Act''.
SEC. 2. ELECTRIC RELIABILITY ORGANIZATION.
(a) In General.--Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:
``SEC. 215. ELECTRIC RELIABILITY ORGANIZATION.
``(a) Definitions.--In this section:
``(1) Affiliated regional reliability entity.--The term
`affiliated regional reliability entity' means an entity
delegated authority under subsection (h).
``(2) Bulk-power system.--
``(A) In general.--The term `bulk-power system'
means all facilities and control systems necessary for
operating an interconnected electric power transmission
grid or any portion of an interconnected electric power
transmission grid.
``(B) Inclusions.--The term `bulk-power system'
includes--
``(i) high voltage transmission lines,
substations, control centers, communications,
data, and operations planning facilities
necessary for the operation of all or any part
of the interconnected electric power
transmission grid; and
``(ii) the output of generating units
necessary to maintain the reliability of the
interconnected electric power transmission
grid.
``(3) Bulk-power system user.--The term `bulk-power system
user' means an entity that--
``(A) sells, purchases, or transmits electric
energy over a bulk-power system;
``(B) owns, operates, or maintains facilities or
control systems that are part of a bulk-power system;
or
``(C) is a system operator.
``(4) Electric reliability organization.--The term
`electric reliability organization' means the organization
designated by the Commission under subsection (d).
``(5) Entity rule.--The term `entity rule' means a rule
adopted by an affiliated regional reliability entity for a
specific region and designed to implement or enforce 1 or more
organization standards.
``(6) Independent director.--The term `independent
director' means a person that--
``(A) is not an officer or employee of an entity
that would reasonably be perceived as having a direct
financial interest in the outcome of a decision by the
board of directors of the electric reliability
organization; and
``(B) does not have a relationship that would
interfere with the exercise of independent judgment in
carrying out the responsibilities of a director of the
electric reliability organization.
``(7) Industry sector.--The term `industry sector' means a
group of bulk-power system users with substantially similar
commercial interests, as determined by the board of directors
of the electric reliability organization.
``(8) Interconnection.--The term `interconnection' means a
geographic area in which the operation of bulk-power system
components is synchronized so that the failure of 1 or more of
the components may adversely affect the ability of the
operators of other components within the interconnection to
maintain safe and reliable operation of the facilities within
their control.
``(9) Organization standard.--
``(A) In general.--The term `organization standard'
means a policy or standard adopted by the electric
reliability organization to provide for the reliable
operation of a bulk-power system.
``(B) Inclusions.--The term `organization standard'
includes--
``(i) an entity rule approved by the
electric reliability organization; and
``(ii) a variance approved by the electric
reliability organization.
``(10) Public interest group.--
``(A) In general.--The term `public interest group'
means a nonprofit private or public organization that
has an interest in the activities of the electric
reliability organization.
``(B) Inclusions.--The term `public interest group'
includes--
``(i) a ratepayer advocate;
``(ii) an environmental group; and
``(iii) a State or local government
organization that regulates participants in,
and promulgates government policy with respect
to, the market for electric energy.
``(11) System operator.--
``(A) In general.--The term `system operator' means
an entity that operates or is responsible for the
operation of a bulk-power system.
``(B) Inclusions.--The term `system operator'
includes--
``(i) a control area operator;
``(ii) an independent system operator;
``(iii) a transmission company;
``(iv) a transmission system operator; and
``(v) a regional security coordinator.
``(12) Variance.--The term `variance' means an exception
from the requirements of an organization standard (including a
proposal for an organization standard in a case in which there
is no organization standard) that is adopted by an affiliated
regional reliability entity and is applicable to all or a part
of the region for which the affiliated regional reliability
entity is responsible.
``(b) Commission Authority.--
``(1) Jurisdiction.--Notwithstanding section 201(f), within
the United States, the Commission shall have jurisdiction over
the electric reliability organization, all affiliated regional
reliability entities, all system operators, and all bulk-power
system users (including entities described in section 201(f)
for purposes of approving organization standards and enforcing
compliance with this section.
``(2) Definition of terms.--The Commission may by
regulation define any term used in this section consistent with
the definitions in subsection (a) and the purpose and intent of
this Act.
``(c) Existing Reliability Standards.--
``(1) Submission to the commission.--Before designation of
an electric reliability organization under subsection (d), any
person, including the North American Electric Reliability
Council and its member Regional Reliability Councils, may
submit to the Commission any reliability standard, guidance,
practice, or amendment to a reliability standard, guidance, or
practice that the person proposes to be made mandatory and
enforceable.
``(2) Review by the commission.--The Commission, after
allowing interested persons an opportunity to submit comments,
may approve a proposed mandatory standard, guidance, practice,
or amendment submitted under paragraph (1) if the Commission
finds that the standard, guidance, or practice is just,
reasonable, not unduly discriminatory or preferential, and in
the public interest.
``(3) Effect of approval.--A standard, guidance, or
practice shall be mandatory and applicable according to its
terms following approval by the Commission and shall remain in
effect until it is--
``(A) withdrawn, disapproved, or superseded by an
organization standard that is issued or approved by the
electric reliability organization and made effective by
the Commission under subsection (e); or
``(B) disapproved by the Commission if, on
complaint or upon motion by the Commission and after
notice and an opportunity for comment, the Commission
finds the standard, guidance, or practice to be unjust,
unreasonable, unduly discriminatory or preferential, or
not in the public interest.
``(4) Enforceability.--A standard, guidance, or practice in
effect under this subsection shall be enforceable by the
Commission.
``(d) Designation of Electric Reliability Organization.--
``(1) Regulations.--
``(A) Proposed regulations.--Not later than 90 days
after the date of enactment of this section, the
Commission shall propose regulations specifying
procedures and requirements for an entity to apply for
designation as the electric reliability organization.
``(B) Notice and comment.--The Commission shall
provide notice and opportunity for comment on the
proposed regulations.
``(C) Final regulation.--Not later than 180 days
after the date of enactment of this section, the
Commission shall promulgate final regulations under
this subsection.
``(2) Application.--
``(A) Submission.--Following the promulgation of
final regulations under paragraph (1), an entity may
submit an application to the Commission for designation
as the electric reliability organization.
``(B) Contents.--The applicant shall describe in
the application--
``(i) the governance and procedures of the
applicant; and
``(ii) the funding mechanism and initial
funding requirements of the applicant.
``(3) Notice and comment.--The Commission shall--
``(A) provide public notice of the application; and
``(B) afford interested parties an opportunity to
comment.
``(4) Designation of electric reliability organization.--
The Commission shall designate the applicant as the electric
reliability organization if the Commission determines that the
applicant--
``(A) has the ability to develop, implement, and
enforce standards that provide for an adequate level of
reliability of bulk-power systems;
``(B) permits voluntary membership to any bulk-
power system user or public interest group;
``(C) ensures fair representation of its members in
the selection of its directors and fair management of
its affairs, taking into account the need for
efficiency and effectiveness in decisionmaking and
operations and the requirements for technical
competency in the development of organization standards
and the exercise of oversight of bulk-power system
reliability;
``(D) ensures that no 2 industry sectors have the
ability to control, and no 1 industry sector has the
ability to veto, the applicant's discharge of its
responsibilities as the electric reliability
organization (including actions by committees
recommending standards for approval by the board or
other board actions to implement and enforce
standards);
``(E) provides for governance by a board wholly
comprised of independent directors;
``(F) provides a funding mechanism and requirements
that--
``(i) are just, reasonable, not unduly
discriminatory or preferential and in the
public interest; and
``(ii) satisfy the requirements of
subsection (l);
``(G) has established procedures for development of
organization standards that--
``(i) provide reasonable notice and
opportunity for public comment, taking into
account the need for efficiency and
effectiveness in decisionmaking and operations
and the requirements for technical competency
in the development of organization standards;
``(ii) ensure openness, a balancing of
interests, and due process; and
``(iii) includes alternative procedures to
be followed in emergencies;
``(H) has established fair and impartial procedures
for implementation and enforcement of organization
standards, either directly or through delegation to an
affiliated regional reliability entity, including the
imposition of penalties, limitations on activities,
functions, or operations, or other appropriate
sanctions;
``(I) has established procedures for notice and
opportunity for public observation of all meetings,
except that the procedures for public observation may
include alternative procedures for emergencies or for
the discussion of information that the directors
reasonably determine should take place in closed
session, such as litigation, personnel actions, or
commercially sensitive information;
``(J) provides for the consideration of
recommendations of States and State commissions; and
``(K) addresses other matters that the Commission
considers appropriate to ensure that the procedures,
governance, and funding of the electric reliability
organization are just, reasonable, not unduly
discriminatory or preferential, and in the public
interest.
``(5) Exclusive designation.--
``(A) In general.--The Commission shall designate
only 1 electric reliability organization.
``(B) Multiple applications.--If the Commission
receives 2 or more timely applications that satisfy the
requirements of this subsection, the Commission shall
approve only the application that the Commission
determines will best implement this section.
``(e) Organization Standards.--
``(1) Submission of proposals to commission.--
``(A) In general.--The electric reliability
organization shall submit to the Commission proposals
for any new or modified organization standards.
``(B) Contents.--A proposal submitted under
subparagraph (A) shall include--
``(i) a concise statement of the purpose of
the proposal; and
``(ii) a record of any proceedings
conducted with respect to the proposal.
``(2) Review by the commission.--
``(A) Notice and comment.--The Commission shall--
``(i) provide notice of a proposal under
paragraph (1); and
``(ii) allow interested persons 30 days to
submit comments on the proposal.
``(B) Action by the commission.--
``(i) In general.--After taking into
consideration any submitted comments, the
Commission shall approve or disapprove a
proposed organization standard not later than
the end of the 60-day period beginning on the
date of the deadline for the submission of
comments, except that the Commission may extend
the 60-day period for an additional 90 days for
good cause.
``(ii) Failure to act.--If the Commission
does not approve or disapprove a proposal
within the period specified in clause (i), the
proposed organization standard shall go into
effect subject to its terms, without prejudice
to the authority of the Commission to modify
the organization standard in accordance with
the standards and requirements of this section.
``(C) Effective date.--An organization standard
approved by the Commission shall take effect not
earlier than 30 days after the date of the Commission's
order of approval.
``(D) Standards for approval.--
``(i) In general.--The Commission shall
approve a proposed new or modified organization
standard if the Commission determines the
organization standard to be just, reasonable,
not unduly discriminatory or preferential, and
in the public interest.
``(ii) Considerations.--In the exercise of
its review responsibilities under this
subsection, the Commission--
``(I) shall give due weight to the
technical expertise of the electric
reliability organization with respect
to the content of a new or modified
organization standard; but
``(II) shall not defer to the
electric reliability organization with
respect to the effect of the
organization standard on competition.
``(E) Remand.--A proposed organization standard
that is disapproved in whole or in part by the
Commission shall be remanded to the electric
reliability organization for further consideration.
``(3) Orders to develop or modify organization standards.--
The Commission, on complaint or on motion of the Commission,
may order the electric reliability organization to develop and
submit to the Commission, by a date specified in the order, an
organization standard or modification to an existing
organization standard to address a specific matter if the
Commission considers a new or modified organization standard
appropriate to carry out this section, and the electric
reliability organization shall develop and submit the
organization standard or modification to the Commission in
accordance with this subsection.
``(4) Variances and entity rules.--
``(A) Proposal.--An affiliated regional reliability
entity may propose a variance or entity rule to the
electric reliability organization.
``(B) Expedited consideration.--If expedited
consideration is necessary to provide for bulk-power
system reliability, the affiliated regional reliability
entity may--
``(i) request that the electric reliability
organization expedite consideration of the
proposal; and
``(ii) file a notice of the request with
the Commission.
``(C) Failure to act.--
``(i) In general.--If the electric
reliability organization fails to adopt the
variance or entity rule, in whole or in part,
the affiliated regional reliability entity may
request that the Commission review the
proposal.
``(ii) Action by the commission.--If the
Commission determines, after a review of the
request, that the action of the electric
reliability organization did not conform to the
applicable standards and procedures approved by
the Commission, or if the Commission determines
that the variance or entity rule is just,
reasonable, not unduly discriminatory or
preferential, and in the public interest and
that the electric reliability organization has
unreasonably rejected or failed to act on the
proposal, the Commission may--
``(I) remand the proposal for
further consideration by the electric
reliability organization; or
``(II) order the electric
reliability organization or the
affiliated regional reliability entity
to develop a variance or entity rule
consistent with that requested by the
affiliated regional reliability entity.
``(D) Procedure.--A variance or entity rule
proposed by an affiliated regional reliability entity
shall be submitted to the electric reliability
organization for review and submission to the
Commission in accordance with the procedures specified
in paragraph (2).
``(5) Immediate effectiveness.--
``(A) In general.--Notwithstanding any other
provision of this subsection, a new or modified
organization standard shall take effect immediately on
submission to the Commission without notice or comment
if the electric reliability organization--
``(i) determines that an emergency exists
requiring that the new or modified organization
standard take effect immediately without notice
or comment;
``(ii) notifies the Commission as soon as
practicable after making the determination;
``(iii) submits the new or modified
organization standard to the Commission not
later than 5 days after making the
determination; and
``(iv) includes in the submission an
explanation of the need for immediate
effectiveness.
``(B) Notice and comment.--The Commission shall--
``(i) provide notice of the new or modified
organization standard or amendment for comment;
and
``(ii) follow the procedures specified in
paragraphs (2) and (3) for review of the new or
modified organization standard.
``(6) Compliance.--Each bulk power system user shall comply
with an organization standard that takes effect under this
section.
``(f) Coordination With Canada and Mexico.--
``(1) Recognition.--The electric reliability organization
shall take all appropriate steps to gain recognition in Canada
and Mexico.
``(2) International agreements.--
``(A) In general.--The President shall use best
efforts to enter into international agreements with the
appropriate governments in Canada and Mexico to provide
for--
``(i) effective compliance with
organization standards; and
``(ii) the effectiveness of the electric
reliability organization in carrying out its
mission and responsibilities.
``(B) Compliance.--All actions taken by the
electric reliability organization, an affiliated
regional reliability entity, and the Commission shall
be consistent with any international agreement under
subparagraph (A).
``(g) Changes in Procedure, Governance, or Funding.--
``(1) Submission to the commission.--The electric
reliability organization shall submit to the Commission--
``(A) any proposed change in a procedure,
governance, or funding provision; or
``(B) any change in an affiliated regional
reliability entity's procedure, governance, or funding
provision relating to delegated functions.
``(2) Contents.--A submission under paragraph (1) shall
include an explanation of the basis and purpose for the change.
``(3) Effectiveness.--
``(A) Changes in procedure.--
``(i) Changes constituting a statement of
policy, practice, or interpretation.--A
proposed change in procedure shall take effect
90 days after submission to the Commission if
the change constitutes a statement of policy,
practice, or interpretation with respect to the
meaning or enforcement of the procedure.
``(ii) Other changes.--A proposed change in
procedure other than a change described in
clause (i) shall take effect on a finding by
the Commission, after notice and opportunity
for comment, that the change--
``(I) is just, reasonable, not
unduly discriminatory or preferential,
and in the public interest; and
``(II) satisfies the requirements
of subsection (d)(4).
``(B) Changes in governance or funding.--A proposed
change in governance or funding shall not take effect
unless the Commission finds that the change--
``(i) is just, reasonable, not unduly
discriminatory or preferential, and in the
public interest; and
``(ii) satisfies the requirements of
subsection (d)(4).
``(4) Order to amend.--
``(A) In general.--The Commission, on complaint or
on the motion of the Commission, may require the
electric reliability organization to amend a
procedural, governance, or funding provision if the
Commission determines that the amendment is necessary
to meet the requirements of this section.
``(B) Filing.--The electric reliability
organization shall submit the amendment in accordance
with paragraph (1).
``(h) Delegations of Authority.--
``(1) In general.--
``(A) Implementation and enforcement of
compliance.--At the request of an entity, the electric
reliability organization shall enter into an agreement
with the entity for the delegation of authority to
implement and enforce compliance with organization
standards in a specified geographic area if the
electric reliability organization finds that--
``(i) the entity satisfies the requirements
of subparagraphs (A), (B), (C), (D), (F), (J),
and (K) of subsection (d)(4); and
``(ii) the delegation would promote the
effective and efficient implementation and
administration of bulk-power system
reliability.
``(B) Other authority.--The electric reliability
organization may enter into an agreement to delegate to
an entity any other authority, except that the electric
reliability organization shall reserve the right to set
and approve standards for bulk-power system
reliability.
``(2) Approval by the commission.--
``(A) Submission to the commission.--The electric
reliability organization shall submit to the
Commission--
``(i) any agreement entered into under this
subsection; and
``(ii) any information the Commission
requires with respect to the affiliated
regional reliability entity to which authority
is delegated.
``(B) Standards for approval.--The Commission shall
approve the agreement, following public notice and an
opportunity for comment, if the Commission finds that
the agreement--
``(i) meets the requirements of paragraph
(1); and
``(ii) is just, reasonable, not unduly
discriminatory or preferential, and in the
public interest.
``(C) Rebuttable presumption.--A proposed
delegation agreement with an affiliated regional
reliability entity organized on an interconnection-wide
basis shall be rebuttably presumed by the Commission to
promote the effective and efficient implementation and
administration of the reliability of the bulk-power
system.
``(D) Invalidity absent approval.--No delegation by
the electric reliability organization shall be valid
unless the delegation is approved by the Commission.
``(3) Procedures for entity rules and variances.--
``(A) In general.--A delegation agreement under
this subsection shall specify the procedures by which
the affiliated regional reliability entity may propose
entity rules or variances for review by the electric
reliability organization.
``(B) Interconnection-wide entity rules and
variances.--In the case of a proposal for an entity
rule or variance that would apply on an
interconnection-wide basis, the electric reliability
organization shall approve the entity rule or variance
unless the electric reliability organization makes a
written finding that the entity rule or variance--
``(i) was not developed in a fair and open
process that provided an opportunity for all
interested parties to participate;
``(ii) would have a significant adverse
impact on reliability or commerce in other
interconnections;
``(iii) fails to provide a level of
reliability of the bulk-power system within the
interconnection such that the entity rule or
variance would be likely to cause a serious and
substantial threat to public health, safety,
welfare, or national security; or
``(iv) would create a serious and
substantial burden on competitive markets
within the interconnection that is not
necessary for reliability.
``(C) Noninterconnection-wide entity rules and
variances.--In the case of a proposal for an entity
rule or variance that would apply only to part of an
interconnection, the electric reliability organization
shall approve the entity rule or variance if the
affiliated regional reliability entity demonstrates
that the proposal--
``(i) was developed in a fair and open
process that provided an opportunity for all
interested parties to participate;
``(ii) would not have an adverse impact on
commerce that is not necessary for reliability;
``(iii) provides a level of bulk-power
system reliability that is adequate to protect
public health, safety, welfare, and national
security and would not have a significant
adverse impact on reliability; and
``(iv) in the case of a variance, is based
on a justifiable difference between regions or
subregions within the affiliated regional
reliability entity's geographic area.
``(D) Action by the electric reliability
organization.--
``(i) In general.--The electric reliability
organization shall approve or disapprove a
proposal under subparagraph (A) within 120 days
after the proposal is submitted.
``(ii) Failure to act.--If the electric
reliability organization fails to act within
the time specified in clause (i), the proposal
shall be deemed to have been approved.
``(iii) Submission to the commission.--
After approving a proposal under subparagraph
(A), the electric reliability organization
shall submit the proposal to the Commission for
approval under the procedures prescribed under
subsection (e).
``(E) Direct submissions.--An affiliated regional
reliability entity may not submit a proposal for
approval directly to the Commission except as provided
in subsection (e)(4).
``(4) Failure to reach delegation agreement.--
``(A) In general.--If an affiliated regional
reliability entity requests, consistent with paragraph
(1), that the electric reliability organization
delegate authority to it, but is unable within 180 days
to reach agreement with the electric reliability
organization with respect to the requested delegation,
the entity may seek relief from the Commission.
``(B) Review by the commission.--The Commission
shall order the electric reliability organization to
enter into a delegation agreement under terms specified
by the Commission if, after notice and opportunity for
comment, the Commission determines that--
``(i) a delegation to the affiliated
regional reliability entity would--
``(I) meet the requirements of
paragraph (1); and
``(II) would be just, reasonable,
not unduly discriminatory or
preferential, and in the public
interest; and
``(ii) the electric reliability
organization unreasonably withheld the
delegation.
``(5) Orders to modify delegation agreements.--
``(A) In general.--On complaint, or on motion of
the Commission, after notice to the appropriate
affiliated regional reliability entity, the Commission
may order the electric reliability organization to
propose a modification to a delegation agreement under
this subsection if the Commission determines that--
``(i) the affiliated regional reliability
entity--
``(I) no longer has the capacity to
carry out effectively or efficiently
the implementation or enforcement
responsibilities under the delegation
agreement;
``(II) has failed to meet its
obligations under the delegation
agreement; or
``(III) has violated this section;
``(ii) the rules, practices, or procedures
of the affiliated regional reliability entity
no longer provide for fair and impartial
discharge of the implementation or enforcement
responsibilities under the delegation
agreement;
``(iii) the geographic boundary of a
transmission entity approved by the Commission
is not wholly within the boundary of an
affiliated regional reliability entity, and the
difference in boundaries is inconsistent with
the effective and efficient implementation and
administration of bulk-power system
reliability; or
``(iv) the agreement is inconsistent with a
delegation ordered by the Commission under
paragraph (4).
``(B) Suspension.--
``(i) In general.--Following an order to
modify a delegation agreement under
subparagraph (A), the Commission may suspend
the delegation agreement if the electric
reliability organization or the affiliated
regional reliability entity does not propose an
appropriate and timely modification.
``(ii) Assumption of responsibilities.--If
a delegation agreement is suspended, the
electric reliability organization shall assume
the responsibilities delegated under the
delegation agreement.
``(i) Organization Membership.--Each system operator shall be a
member of--
``(1) the electric reliability organization; and
``(2) any affiliated regional reliability entity operating
under an agreement effective under subsection (h) applicable to
the region in which the system operator operates, or is
responsible for the operation of, a transmission facility.
``(j) Enforcement.--
``(1) Disciplinary actions.--
``(A) In general.--Consistent with procedures
approved by the Commission under subsection (d)(4)(H),
the electric reliability organization may impose a
penalty, limitation on activities, functions, or
operations, or other disciplinary action that the
electric reliability organization finds appropriate
against a bulk-power system user if the electric
reliability organization, after notice and an
opportunity for interested parties to be heard, issues
a finding in writing that the bulk-power system user
has violated an organization standard.
``(B) Notification.--The electric reliability
organization shall immediately notify the Commission of
any disciplinary action imposed with respect to an act
or failure to act of a bulk-power system user that
affected or threatened to affect bulk-power system
facilities located in the United States.
``(C) Right to petition.--A bulk-power system user
that is the subject of disciplinary action under
paragraph (1) shall have the right to petition the
Commission for a modification or rescission of the
disciplinary action.
``(D) Injunctions.--If the electric reliability
organization finds it necessary to prevent a serious
threat to reliability, the electric reliability
organization may seek injunctive relief in the United
States district court for the district in which the
affected facilities are located.
``(E) Effective date.--
``(i) In general.--Unless the Commission,
on motion of the Commission or on application
by the bulk-power system user that is the
subject of the disciplinary action, suspends
the effectiveness of a disciplinary action, the
disciplinary action shall take effect on the
30th day after the date on which--
``(I) the electric reliability
organization submits to the
Commission--
``(aa) a written finding
that the bulk-power system user
violated an organization
standard; and
``(bb) the record of
proceedings before the electric
reliability organization; and
``(II) the Commission posts the
written finding on the Internet.
``(ii) Duration.--A disciplinary action
shall remain in effect or remain suspended
unless the Commission, after notice and
opportunity for hearing, affirms, sets aside,
modifies, or reinstates the disciplinary
action.
``(iii) Expedited consideration.--The
Commission shall conduct the hearing under
procedures established to ensure expedited
consideration of the action taken.
``(2) Compliance orders.--The Commission, on complaint by
any person or on motion of the Commission, may order compliance
with an organization standard and may impose a penalty,
limitation on activities, functions, or operations, or take
such other disciplinary action as the Commission finds
appropriate, against a bulk-power system user with respect to
actions affecting or threatening to affect bulk-power system
facilities located in the United States if the Commission
finds, after notice and opportunity for a hearing, that the
bulk-power system user has violated or threatens to violate an
organization standard.
``(3) Other actions.--The Commission may take such action
as is necessary against the electric reliability organization
or an affiliated regional reliability entity to ensure
compliance with an organization standard, or any Commission
order affecting electric reliability organization or affiliated
regional reliability entity.
``(k) Reliability Reports.--The electric reliability organization
shall--
``(1) conduct periodic assessments of the reliability and
adequacy of the interconnected bulk-power system in North
America; and
``(2) report annually to the Secretary of Energy and the
Commission its findings and recommendations for monitoring or
improving system reliability and adequacy.
``(l) Assessment and Recovery of Certain Costs.--
``(1) In general.--The reasonable costs of the electric
reliability organization, and the reasonable costs of each
affiliated regional reliability entity that are related to
implementation or enforcement of organization standards or
other requirements contained in a delegation agreement approved
under subsection (h), shall be assessed by the electric
reliability organization and each affiliated regional
reliability entity, respectively, taking into account the
relationship of costs to each region and based on an allocation
that reflects an equitable sharing of the costs among all electric
energy consumers.
``(2) Rules.--The Commission shall provide by rule for the
review of costs and allocations under paragraph (1) in
accordance with the standards in this subsection and subsection
(d)(4)(F).
``(m) Application of Antitrust Laws.--
``(1) In general.--Notwithstanding any other provision of
law, the following activities are rebuttably presumed to be in
compliance with the antitrust laws of the United States:
``(A) Activities undertaken by the electric
reliability organization under this section or
affiliated regional reliability entity operating under
a delegation agreement under subsection (h).
``(B) Activities of a member of the electric
reliability organization or an affiliated regional
reliability entity in pursuit of the objectives of the
electric reliability organization or affiliated
regional reliability entity under this section
undertaken in good faith under the rules of the
organization of the electric reliability organization
or affiliated regional reliability entity.
``(2) Availability of defenses.--In a civil action brought
by any person or entity against the electric reliability
organization or an affiliated regional reliability entity
alleging a violation of an antitrust law based on an activity
under this Act, the defenses of primary jurisdiction and
immunity from suit and other affirmative defenses shall be
available to the extent applicable.
``(n) Regional Advisory Role.--
``(1) Establishment of regional advisory body.--The
Commission shall establish a regional advisory body on the
petition of the Governors of at least two-thirds of the States
within a region that have more than one-half of their
electrical loads served within the region.
``(2) Membership.--A regional advisory body--
``(A) shall be composed of 1 member from each State
in the region, appointed by the Governor of the State;
and
``(B) may include representatives of agencies,
States, and Provinces outside the United States, on
execution of an appropriate international agreement
described in subsection (f).
``(3) Functions.--A regional advisory body may provide
advice to the electric reliability organization, an affiliated
regional reliability entity, or the Commission regarding--
``(A) the governance of an affiliated regional
reliability entity existing or proposed within a
region;
``(B) whether a standard proposed to apply within
the region is just, reasonable, not unduly
discriminatory or preferential, and in the public
interest; and
``(C) whether fees proposed to be assessed within
the region are--
``(i) just, reasonable, not unduly
discriminatory or preferential, and in the
public interest; and
``(ii) consistent with the requirements of
subsection (l).
``(4) Deference.--In a case in which a regional advisory
body encompasses an entire interconnection, the Commission may
give deference to advice provided by the regional advisory body
under paragraph (3).
``(o) Applicability of Section.--This section does not apply
outside the 48 contiguous States.
``(p) Rehearings; Court Review of Orders.--Section 313 applies to
an order of the Commission issued under this section.
``(q) Preservation of State Authority.--
``(1) Extent of authority of the electric reliability
organization.--The electric reliability organization shall have
authority to develop, implement, and enforce compliance with
standards for the reliable operation of only the bulk-power
system.
``(2) No authority with respect to adequacy or safety.--
This section does not provide the electric reliability
organization or the Commission with the authority to establish
or enforce compliance with standards for adequacy or safety of
electric facilities or services.
``(3) No preemption.--
``(A) In general.--Nothing in this section preempts
the authority of any State to take action to ensure the
safety, adequacy, and reliability of electric service
within the State, so long as the action is not
inconsistent with any organization standard.
``(B) Consistency determination.--Not later than 90
days after the electric reliability organization or any
other affected party submits to the Commission a
petition for a determination that a State action is
inconsistent with an organization standard, the
Commission shall issue a final order determining
whether a State action is inconsistent with an
organization standard, after notice and opportunity for
comment, taking into consideration any recommendations
of the electric reliability organization.
``(C) Stay.--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.''.
(b) Enforcement.--
(1) General penalties.--Section 316(c) of the Federal Power
Act (16 U.S.C. 825o(c)) is amended--
(A) by striking ``subsection'' and inserting
``section''; and
(B) by striking ``or 214'' and inserting ``214, or
215''.
(2) Certain provisions.--Section 316A of the Federal Power
Act (16 U.S.C. 825o-1) is amended by striking ``or 214'' each
place it appears and inserting ``214, or 215''.
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