[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 764 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 764

 To direct the Federal Energy Regulatory Commission to impose just and 
 reasonable load-differentiated demand rates or cost-of-service based 
 rates on sales by public utilities of electric energy at wholesale in 
           the western energy market, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 24, 2001

 Mrs. Feinstein (for herself, Mr. Smith of Oregon, Mr. Bingaman, Mrs. 
Murray, Ms. Cantwell, and Mr. Lieberman) introduced the following bill; 
   which was read twice and referred to the Committee on Energy and 
                           Natural Resources

_______________________________________________________________________

                                 A BILL


 
 To direct the Federal Energy Regulatory Commission to impose just and 
 reasonable load-differentiated demand rates or cost-of-service based 
 rates on sales by public utilities of electric energy at wholesale in 
           the western energy market, 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. FINDINGS.

    Congress finds that--
            (1) prices in the spot market for electric energy in the 
        western energy market have consistently remained at levels that 
        are multiples of energy prices prevailing before 2000;
            (2) the price increases began in California and spread 
        throughout the western energy market;
            (3) the Federal Energy Regulatory Commission, in an order 
        issued November 1, 2000, found that prices in California and 
        the western energy market are unjust and unreasonable; and
            (4) the high and volatile prices for natural gas are 
        reflected in the costs of producing electricity.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
            (2) Cost-of-service based rate.--The term ``cost-of-service 
        based rate'' means a rate, charge, or classification for the 
        sale of electric energy that is equal to--
                    (A) all the reasonable variable costs for producing 
                the electric energy;
                    (B) all the reasonable fixed costs for producing 
                the electric energy;
                    (C) a reasonable risk premium or return on invested 
                capital; and
                    (D) all other reasonable costs associated with the 
                production, acquisition, conservation, and transmission 
                of electric power.
            (3) Load-differentiated demand rate.--The term ``load-
        differentiated demand rate'' means a rate, charge, or 
        classification for the sale of electric energy that reflects 
        differences in the demand for electric energy during various 
        times of day, months, seasons, or other time periods.
            (4) Public utility.--The term ``public utility'' has the 
        meaning given the term in section 201 of the Federal Power Act 
        (16 U.S.C. 824).
            (5) Western energy market.--The term ``western energy 
        market'' means the area within the United States that is 
        covered by the Western Systems Coordinating Council.

SEC. 3. WHOLESALE ELECTRIC ENERGY RATES OF REGULATED ENTITIES IN THE 
              WESTERN ENERGY MARKET.

    (a) Imposition of Wholesale Electric Energy Rates.--Not later than 
60 days after the date of enactment of this Act, the Commission shall 
impose just and reasonable load-differentiated demand rates or cost-of-
service based rates on sales by public utilities of electric energy at 
wholesale in the western energy market.
    (b) Limitations.--
            (1) In general.--A load-differentiated demand rate or cost-
        of-service based rate shall not apply to a sale of electric 
energy at wholesale for delivery in a State that, after the date of 
enactment of this Act--
                    (A) prohibits the State public utility commission 
                from approving the passing through to retail consumers 
                of cost-of-service based rates or load-differentiated 
                demand rates approved by the Commission; or
                    (B) imposes a price limit on the sale of electric 
                energy at retail that precludes a public utility (or 
                any entity that is authorized to purchase electricity 
                on behalf of a public utility or a State) from making a 
                payment when due to any entity within the western 
                energy market from which the public utility purchases 
                electric energy for resale at retail within the western 
                energy market.
            (2) No orders to sell without a reasonable assurance of 
        payment.--Notwithstanding section 302 of the Natural Gas Policy 
        Act of 1978 (15 U.S.C. 3362), section 202(c) of the Federal 
        Power Act (16 U.S.C. 824a(c)), or section 101 of the Defense 
        Production Act of 1950 (50 U.S.C. App. 2071), neither the 
        Secretary of Energy nor the Commission may issue an order that 
        requires a seller of electric energy or natural gas to sell, on 
        or after the date of enactment of this Act, electric energy or 
        natural gas to a buyer in a State described in paragraph (1) 
        unless there is a reasonable assurance that the Commission 
        determines is sufficient to ensure that the seller will be 
        paid--
                    (A) the full purchase price when due, as agreed to 
                by the buyer and seller; or
                    (B) if the buyer and seller are unable to agree on 
                a price--
                            (i) a fair and equitable price for natural 
                        gas, as determined by the President under 
                        section 302 of the Natural Gas Policy Act of 
                        1978 (15 U.S.C. 3362); or
                            (ii) a just and reasonable price for 
                        electric energy, as determined by the Secretary 
                        of Energy or the Commission, as appropriate, 
                        under section 202(c) of the Federal Power Act 
                        (16 U.S.C. 824a(c)).
            (3) Requirement to meet in-state demand.--Notwithstanding 
        any other provision of law, a State public utility commission 
        in the western energy market may prohibit any utility subject 
        to the jurisdiction of the State public utility commission from 
        making any sale of electric energy to a purchaser outside the 
        service area of the utility at any time at which the State 
        public utility commission has reason to believe that delivery 
        of the electric energy would impair the ability of the utility 
        to meet, at or after the time of the delivery, the demand for 
        electric energy in the service area of the utility.
    (c) Authority of State Regulatory Authorities.--This section does 
not diminish or have any other effect on the authority of a State 
regulatory authority (as defined in section 3 of the Federal Power Act 
(16 U.S.C. 796)) to regulate rates and charges for the sale of electric 
energy to consumers, including the authority to determine the manner in 
which wholesale rates shall be passed through to consumers (including 
the setting of tiered pricing, real-time pricing, and baseline rates).
    (d) Repeal.--Effective March 1, 2003, this section is repealed, and 
any load-differentiated demand rate or cost-of-service based rate 
imposed under this section that is then in effect shall no longer be 
effective.

SEC. 4. NATURAL GAS RATES.

    (a) Inapplicability of Waiver of Maximum Rate Ceiling Provision to 
Transportation of Natural Gas Into the State of California.--Effective 
beginning on the date of enactment of this Act, paragraph (i) of 
section 284.8 of title 18, Code of Federal Regulations, shall not apply 
to the transportation of natural gas into the State of California from 
outside the State.
    (b) Disclosure of Commodity Portion and Transportation Portion of 
Sale Price in Bundled Natural Gas Transactions.--
            (1) Definition of bundled transaction.--In this subsection, 
        the term ``bundled transaction'' means a transaction for the 
        sale of natural gas in which the sale price includes both the 
        cost of the natural gas and the cost of transporting the 
        natural gas.
            (2) Disclosure.--Exercising authority under section 4 of 
        the Natural Gas Act (15 U.S.C. 717c), not later than 60 days 
        after the date of enactment of this Act, the Commission shall 
        promulgate a regulation that requires any person that sells 
        natural gas in a bundled transaction under which the natural 
        gas is to be transported into the State of California from 
        outside the State to file with the Commission, not later than a 
        date specified by the Commission, a statement that discloses--
                    (A) the portion of the sale price that is 
                attributable to the price paid by the seller for the 
                natural gas; and
                    (B) the portion of the sale price that is 
                attributable to the price paid for transportation of 
                the natural gas.

SEC. 5. SENSE OF THE SENATE REGARDING THE BONNEVILLE POWER 
              ADMINISTRATION.

    It is the sense of the Senate that the Bonneville Power 
Administration should--
            (1) take steps to reduce its wholesale electric power 
        purchase needs in the rate period beginning October 1, 2001; 
        and
            (2) undertake other actions to minimize its potential 
        wholesale electric rate increase due to take effect October 1, 
        2001.

SEC. 6. EFFECT OF ACT.

    Nothing in this Act--
            (1) affects any energy production that, as of the date of 
        enactment of this Act, is not online and for which an 
        application for a permit to produce electricity has not been 
        filed;
            (2) affects any contract for the purchase of electric 
        energy except a contract for a spot market purchase; or
            (3) prohibits a State or other entity from appearing in a 
        Federal court in any instance in which it is alleged that the 
        Commission is not enforcing the Federal Power Act (16 U.S.C. 
        791a et seq.).
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