[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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