[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1481 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 1481

 To ensure reliability of electric service to provide for expansion of 
   electricity transmission networks in order to support competitive 
  electricity markets to modernize regulation, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 5, 2005

 Mr. Wynn (for himself and Mrs. Myrick) introduced the following bill; 
  which was referred to the Committee on Energy and Commerce, and in 
    addition to the Committee on Ways and Means, 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 ensure reliability of electric service to provide for expansion of 
   electricity transmission networks in order to support competitive 
  electricity markets to modernize regulation, 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 AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Interstate 
Transmission Act''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Transmission infrastructure investment.
Sec. 3. Electric reliability standards.
Sec. 5. Disposition of property.
Sec. 6. Regional transmission organizations.
Sec. 7. Siting of interstate electric transmission facilities.
Sec. 8. Electric transmission property treated as 15-year property.

SEC. 2. FINDINGS.

    Congress finds as follows:
            (1) The expansion, enhancement, and improvement of 
        transmission facilities are necessary to maintain and improve 
        reliability of electric service.
            (2) Transmission networks are the backbone of reliable 
        delivery of electric energy, increased interstate commerce in 
        electricity, and competitive power markets.
            (3) Wholesale electric competition, already in effect 
        across the nation, and retail electric competition, adopted by 
        nearly half of the States, depend on adequate transmission 
        networks to benefit electric consumers.
            (4) To maintain and improve reliability of electric service 
        and support competitive power markets, the economics of the 
        business of electric transmission and the regulatory structures 
        applicable thereto must be improved.

SEC. 3. TRANSMISSION INFRASTRUCTURE INVESTMENT.

     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. TRANSMISSION INFRASTRUCTURE INVESTMENT.

    ``(a) Rulemaking Requirement.--Within 1 year after enactment of 
this section, the Commission shall establish, by rule, incentive-based, 
performance-based, participant-funded, and cost-based (including, but 
not limited to performance-based) rate treatments for the transmission 
of electric energy in interstate commerce by public utilities to 
benefit consumers by ensuring reliability and reducing the cost of 
delivered power by reducing transmission congestion. Such rule shall--
            ``(1) promote reliable and economically efficient 
        transmission and generation of electricity by promoting capital 
        investment in the enlargement, improvement, maintenance and 
        operation of facilities for the transmission of electric energy 
        in interstate commerce;
            ``(2) provide a return on equity that attracts new 
        investment in transmission facilities (including related 
        transmission technologies);
            ``(3) encourage deployment of transmission technologies and 
        other measures to increase the capacity and efficiency of 
        existing transmission facilities and improve the operation of 
        such facilities; and
            ``(4) allow recovery of all prudently incurred costs 
        necessary to comply with mandatory reliability standards issued 
        pursuant to section 216 of this Act.
The Commission may, from time to time, revise such rule.
    ``(b) Transmission Rates and RTO Participation.-- The Commission 
shall provide for--
            ``(1) recovery of all prudently incurred costs to develop 
        and participate in any proposed or approved RTO, ISO, or 
        independent transmission company;
            ``(2) recovery of all costs previously approved by a State 
        commission which exercised jurisdiction over the transmission 
        facilities prior to the utility's participation in the RTO or 
        ISO, including costs necessary to honor preexisting 
        transmission service contracts, in a manner which does not 
        reduce the revenues the utility receives for transmission 
        services for a reasonable transition period after the utility 
        joins the RTO or ISO;
            ``(3) recovery as an expense in rates of the costs 
        prudently incurred to conduct transmission planning and 
        reliability activities, including the costs of participating in 
        RTO, ISO and other regional planning activities and design, 
        study and other precertification costs involved in seeking 
        permits and approvals for proposed transmission facilities;
            ``(4) a current return in rates for construction work in 
        progress for transmission facilities and full recovery of 
        prudently incurred costs for constructing transmission 
        facilities;
            ``(5) recovery of all prudently incurred capital, 
        operation, and maintenance costs, and other costs necessary to 
        operate and maintain transmission service, including generation 
        and transmission based ancillary services and taxes;
            ``(6) various rate structures, including formula 
        transmission rates; and
            ``(7) a maximum 15 year accelerated book depreciation on 
        new transmission facilities for rate treatment purposes.
The Commission shall ensure that any costs recoverable pursuant to this 
subsection may be recovered by such utility through the transmission 
rates charged by such utility or through the transmission rates charged 
by the RTO or ISO that provides transmission service to such utility.
    ``(c) Just and Reasonable Rates.--All rates approved under the 
rules adopted pursuant to this section, including any revisions to such 
rules, are subject to the requirement of sections 205 and 206 that all 
rates, charges, terms, and conditions be just and reasonable and not 
unduly discriminatory or preferential.''.

SEC. 4. ELECTRIC RELIABILITY STANDARDS.

    (a) In General.--Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding the following new section at the end 
thereof:

``SEC. 216. ELECTRIC RELIABILITY.

    ``(a) Definitions.--For purposes of this section--
            ``(1) The term `bulk-power system' means--
                    ``(A) facilities and control systems necessary for 
                operating an interconnected electric energy 
                transmission network (or any portion thereof); and
                    ``(B) electric energy from generation facilities 
                needed to maintain transmission system reliability.
        The term does not include facilities used in the local 
        distribution of electric energy.
            ``(2) The terms `Electric Reliability Organization' and 
        `ERO' mean the organization certified by
            ``(3) The term `reliability standard' means a requirement, 
        approved by the Commission under this section, to provide for 
        reliable operation of the bulk-power system. The term includes 
        requirements for the operation of existing bulk-power system 
        facilities and the design of planned additions or modifications 
        to such facilities to the extent necessary to provide for 
        reliable operation of the bulk-power system, but the term does 
        not include any requirement to enlarge such facilities or to 
        construct new transmission capacity or generation capacity.
            ``(4) The term `reliable operation' means operating the 
        elements of the bulk-power system within equipment and electric 
        system thermal, voltage, and stability limits so that 
        instability, uncontrolled separation, or cascading failures of 
        such system will not occur as a result of a sudden disturbance 
        or unanticipated failure of system elements.
            ``(5) The term `Interconnection' means a geographic area in 
        which the operation of bulk-power system components is 
        synchronized such that the failure of one or more of such 
        components may adversely affect the ability of the operators of 
        other components within the system to maintain reliable 
        operation of the facilities within their control.
            ``(6) The term `transmission organization' means a regional 
        transmission organization, independent system operator, 
        independent transmission provider, or other transmission 
        organization finally approved by the Commission for the 
        operation of transmission facilities.
            ``(7) The term `regional entity' means an entity having 
        enforcement authority pursuant to subsection (e)(4).
the Commission under subsection (c) the purpose of which is to 
establish and enforce reliability standards for the bulk-power system, 
subject to Commission review.
    ``(b) Jurisdiction and Applicability.--(1) The Commission shall 
have jurisdiction, within the United States, over the ERO certified by 
the Commission under subsection (c), 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 established under this section 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.
    ``(2) The Commission shall issue a final rule to implement the 
requirements of this section not later than 180 days after the date of 
enactment of this section.
    ``(c) Certification.--Following the issuance of a Commission rule 
under subsection (b)(2), any person may submit an application to the 
Commission for certification as the Electric Reliability Organization 
(ERO). The Commission may certify one such ERO if the Commission 
determines that such ERO--
            ``(1) has the ability to develop and enforce, subject to 
        subsection (e)(2), reliability standards that provide for an 
        adequate level of reliability of the bulk-power system; and
            ``(2) has established rules that--
                    ``(A) 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 decisionmaking 
                in any ERO committee or subordinate organizational 
                structure;
                    ``(B) allocate equitably reasonable dues, fees, and 
                other charges among end users for all activities under 
                this section;
                    ``(C) provide fair and impartial procedures for 
                enforcement of reliability standards through the 
                imposition of penalties in accordance with subsection 
                (e) (including limitations on activities, functions, or 
                operations, or other appropriate sanctions);
                    ``(D) 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; and
                    ``(E) provide for taking, after certification, 
                appropriate steps to gain recognition in Canada and 
                Mexico.
    ``(d) Reliability Standards.--(1) The Electric Reliability 
Organization shall file each reliability standard or modification to a 
reliability standard that it proposes to be made effective under this 
section with the Commission.
    ``(2) The Commission may approve by rule or order a proposed 
reliability standard or modification to a 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 or modification to a reliability standard and to the 
technical expertise of a regional entity organized on an 
Interconnection-wide basis with respect to a reliability standard to be 
applicable within that Interconnection, but shall not defer with 
respect to the effect of a standard on competition. A proposed standard 
or modification shall take effect upon approval by the Commission.
    ``(3) The Electric Reliability Organization shall rebuttably 
presume that a proposal from a regional entity organized on an 
Interconnection-wide basis for a reliability standard or modification 
to a reliability standard to be applicable on an Interconnection-wide 
basis is just, reasonable, and 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 
or a modification to a reliability standard that the Commission 
disapproves in whole or in part.
    ``(5) The Commission, upon its own motion or upon complaint, may 
order the 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.
    ``(6) The final rule adopted under subsection (b)(2) shall include 
fair processes for the identification and timely resolution of any 
conflict between a reliability standard and any function, rule, order, 
tariff, rate schedule, or agreement accepted, approved, or ordered by 
the Commission applicable to a transmission organization. Such 
transmission organization shall continue to comply with such function, 
rule, order, tariff, rate schedule, or agreement accepted, approved, or 
ordered by the Commission until--
            ``(A) the Commission finds a conflict exists between a 
        reliability standard and any such provision;
            ``(B) the Commission orders a change to such provision 
        pursuant to section 206 of this part; and
            ``(C) the ordered change becomes effective under this part.
If the Commission determines that a reliability standard needs to be 
changed as a result of such a conflict, it shall order the ERO to 
develop and file with the Commission a modified reliability standard 
under paragraph (4) or (5) of this subsection.
    ``(e) Enforcement.--(1) The ERO may impose, subject to paragraph 
(2), a penalty on a user or owner or operator of the bulk-power system 
for a violation of a reliability standard approved by the Commission 
under subsection (d) if the ERO, after notice and an opportunity for a 
hearing--
            ``(A) finds that the user or owner or operator has violated 
        a reliability standard approved by the Commission under 
        subsection (d); and
            ``(B) files notice and the record of the proceeding with 
        the Commission.
    ``(2) A penalty imposed under paragraph (1) may take effect not 
earlier than the 31st day after the electric reliability organization 
files with the Commission notice of the penalty and the record of 
proceedings. Such penalty shall be subject to review by the Commission, 
on its own motion or upon application by the user, owner, or operator 
that is the subject of the penalty filed within 30 days after the date 
such notice is filed with the Commission. Application to the Commission 
for review, or the initiation of review by the Commission on its own 
motion, shall not operate as a stay of such penalty unless the 
Commission otherwise orders upon its own motion or upon application by 
the user, owner, or operator that is the subject of such penalty. In 
any proceeding to review a penalty imposed under paragraph (1), the 
Commission, after notice and opportunity for hearing (which hearing may 
consist solely of the record before the electric reliability 
organization and opportunity for the presentation of supporting reasons 
to affirm, modify, or set aside the penalty), shall by order affirm, 
set aside, reinstate, or modify the penalty, and, if appropriate, 
remand to the electric reliability organization for further 
proceedings. The Commission shall implement expedited procedures for 
such hearings.
    ``(3) 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 engaged or is about to 
engage in any acts or practices that constitute or will constitute a 
violation of a reliability standard.
    ``(4) The Commission shall establish regulations authorizing the 
ERO to enter into an agreement to delegate authority to a regional 
entity for the purpose of proposing reliability standards to the ERO 
and enforcing reliability standards under paragraph (1) if--
            ``(A) the regional entity is governed by--
                    ``(i) an independent board;
                    ``(ii) a balanced stakeholder board; or
                    ``(iii) a combination independent and balanced 
                stakeholder board;
            ``(B) the regional entity otherwise satisfies the 
        provisions of subsection (c)(1) and (2); and
            ``(C) the agreement promotes effective and efficient 
        administration of bulk-power system reliability.
The Commission may modify such delegation. The ERO and 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 and 
should be approved. Such regulation may provide that the Commission may 
assign the ERO's authority to enforce reliability standards under 
paragraph (1) directly to a regional entity consistent with the 
requirements of this paragraph.
    ``(5) The Commission may take such action as is necessary or 
appropriate against the ERO or a regional entity to ensure compliance 
with a reliability standard or any Commission order affecting the ERO 
or a regional entity.
    ``(6) Any penalty imposed under this section shall bear a 
reasonable relation to the seriousness of the violation and shall take 
into consideration the efforts of such user, owner, or operator to 
remedy the violation in a timely manner.
    ``(f) Changes in Electricity Reliability Organization Rules.--The 
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 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).
    ``(g) Reliability Reports.--The Electric Reliability Organization 
shall conduct periodic assessments of the reliability and adequacy of 
the bulk-power system in North America.
    ``(h) Coordination With Canada and Mexico.--The President is urged 
to negotiate 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.
    ``(i) Savings Provisions.--(1) The Electric Reliability 
Organization shall have authority to develop and enforce compliance 
with reliability standards for only the bulk-power system.
    ``(2) This section does not authorize the Electric Reliability 
Organization or the Commission 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 reliability standard, except that 
the State of New York may establish rules that result in greater 
reliability within that State, as long as such action does not result 
in lesser reliability outside the State than that provided by the 
reliability standards.
    ``(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 a reliability standard, 
taking into consideration any recommendation of the Electric 
Reliability Organization.
    ``(5) The Commission, after consultation with the Electric 
Reliability Organization and the State taking action, may stay the 
effectiveness of any State action, pending the Commission's issuance of 
a final order.
    ``(j) Regional Advisory Bodies.--The Commission shall establish a 
regional advisory body on the petition of at least two-thirds of the 
States within a region that have more than one-half of their electric 
load served within the region. A regional advisory body shall be 
composed of one member from each participating State in the region, 
appointed by the Governor of each State, and may include 
representatives of agencies, States, and provinces outside the United 
States. A regional advisory body may provide advice to the Electric 
Reliability Organization, a regional entity, or the Commission 
regarding the governance of an existing or proposed regional entity 
within the same region, whether a standard proposed to apply within the 
region is just, reasonable, not unduly discriminatory or preferential, 
and in the public interest, whether fees proposed to be assessed within 
the region are just, reasonable, not unduly discriminatory or 
preferential, and in the public interest and any other responsibilities 
requested by the Commission. The Commission may give deference to the 
advice of any such regional advisory body if that body is organized on 
an Interconnection-wide basis.
    ``(k) Application to Alaska and Hawaii.--The provisions of this 
section do not apply to Alaska or Hawaii.''.
    (b) Status of ERO.--The Electric Reliability Organization certified 
by the Federal Energy Regulatory Commission under section 215(c) of the 
Federal Power Act and any regional entity delegated enforcement 
authority pursuant to section 215(e)(4) of that Act are not 
departments, agencies, or instrumentalities of the United States 
Government.

SEC. 5. DISPOSITION OF PROPERTY.

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

SEC. 6. REGIONAL TRANSMISSION ORGANIZATIONS.

     Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is 
amended by adding at the end thereof the following new section:

``SEC. 217. REGIONAL TRANSMISSION ORGANIZATIONS.

    ``(a) In General.--Among options for the formation of a 
transmission organization, the Commission shall prefer those in which--
            ``(1) participation in the organization by transmitting 
        utilities is voluntary;
            ``(2) the form, structure, and operating entity of the 
        organization are approved of by participating transmitting 
        utilities; and
            ``(3) market incentives exist to promote investment for 
        expansion of transmission facilities and for the introduction 
        of new transmission technologies within the territory of the 
        organization.
    ``(b) Conditions.--No order issued under this Act shall require or 
shall be conditioned upon a requirement that a transmitting utility 
transfer control of jurisdictional facilities to a regional 
transmission organization.''.

SEC. 7. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

    (a) Amendment of Federal Power Act.--Part II of the Federal Power 
Act is amended by adding at the end the following:

``SEC. 218. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

    ``(a) Designation of National Interest Electric Transmission 
Corridors.--
            ``(1) Transmission congestion study.--Within 1 year after 
        the enactment of this section, and no less frequently than 
        every 3 years thereafter, the Secretary of Energy, in 
        consultation with affected States, shall conduct a study of 
        electric transmission congestion. After considering 
        alternatives and recommendations from interested parties, 
        including an opportunity for comment from affected States, the 
        Secretary shall issue a report, based on such study, which may 
        designate any geographic area experiencing or likely to 
        experience electric energy transmission capacity constraints or 
        congestion that adversely affects consumers as a national 
        interest electric transmission corridor. The Secretary shall 
        rely upon information provided by regional transmission 
        organizations developed in conjunction with States through 
        regional transmission organization planning processes, 
        information provided by State public utility commissions, and 
        such other information about transmission constraints, 
        reliability, and prices for electric energy as the Secretary 
        deems appropriate.
            ``(2) Considerations.--In determining whether to designate 
        a national interest electric transmission corridor referred to 
        in paragraph (1) under this section, the Secretary shall 
        consider, among other factors, the effect of additional 
        transmission capacity on reliability, energy markets, economic 
        growth, and national security.
    ``(b) Construction Permit.--Except as provided in subsection (i), 
the Commission is authorized, upon its own motion or upon request, 
after notice and an opportunity for hearing, to issue a permit or 
permits for the construction or modification of electric transmission 
facilities in a national interest electric transmission corridor 
designated by the secretary under subsection (a) if the Commission 
finds that_
            ``(1)(A) a State in which the transmission facilities are 
        to be constructed or modified is without authority to--
                    ``(i) approve the siting of the facilities; or
                    ``(ii) consider the interstate benefits expected to 
                be achieved by the proposed construction or 
                modification of transmission facilities in the State;
            ``(B) the applicant for a permit is a transmitting utility 
        under this Act but does not qualify to apply for a permit or 
        siting approval for the proposed project in a State because the 
        applicant does not serve end-use customers in the State; or
            ``(C) a State commission or other entity that has authority 
        to approve the siting of the facilities has--
                    ``(i) withheld approval for more than 1 year after 
                the filing of an application pursuant to applicable law 
                seeking approval or 1 year after the designation of the 
                relevant national interest electric transmission 
                corridor, whichever is later; or
                    ``(ii) conditioned its approval in such a manner 
                that the proposed construction or modification will not 
                significantly reduce transmission congestion in 
                interstate commerce or is not economically feasible;
            ``(2) the facilities to be authorized by the permit will be 
        used for the transmission of electric energy in interstate 
        commerce;
            ``(3) the proposed construction or modification is 
        consistent with the public interest; and
            ``(4) the proposed construction or modification will 
        significantly reduce transmission congestion in interstate 
        commerce and protects or benefits consumers.
    ``(c) Permit Applications.--Applications for permits to be issued 
pursuant to subsection (b) shall be made in writing to the Commission. 
The Commission shall issue rules setting forth the form of the 
application, the information to be contained in the application, and 
the manner of service of notice of the permit application upon 
interested persons.
    ``(d) Comments.--The Commission shall afford each State in which a 
transmission facility covered by the permit to be issued under 
subsection (b) is or will be located, each affected Federal agency and 
Indian tribe, private property owners, 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.
    ``(e) Rights-of-Way.--In the case of a permit under subsection (b) 
for electric transmission facilities to be located on property other 
than property owned by the United States or a State, if the permit 
holder 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 or modify such transmission facilities, the 
permit holder 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 concerned 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 may 
be with the practice and procedure in similar action or proceeding in 
the courts of the State where the property is situated.
    ``(f) State Law.-- Nothing in this section shall preclude any 
person from constructing or modifying any transmission facility 
pursuant to State law.
    ``(g) Coordination of Federal Authorizations for Transmission and 
Distribution Facilities.--
            ``(1) Lead agency.--If an applicant, or prospective 
        applicant, for a Federal authorization related to an electric 
        transmission or distribution facility so requests, the 
        Secretary of Energy (DOE) shall act as the lead agency for 
        purposes of coordinating and assuring expeditious processing of 
        all applicable Federal authorizations and related environmental 
        reviews of the facility. For purposes of this subsection, the 
        term `Federal authorization' means any authorization required 
        under Federal law in order to site a transmission or 
        distribution facility, including but not limited to such 
        permits, special use authorizations, certifications, opinions, 
        or other approvals as may be required, whether issued by a 
        Federal or a State agency. To the maximum extent practicable 
        under applicable Federal law, the Secretary of Energy shall 
        coordinate this Federal authorization and review process with 
        any Indian tribes, multi-State entities, and State agencies 
        that are responsible for conducting any separate permitting and 
        environmental reviews of the facility, to ensure timely and 
        efficient review and permit decisions.
            ``(2) Authority to set deadlines.--As lead agency, the 
        Secretary of Energy shall establish prompt and binding 
        intermediate milestones and deadlines for the review of, and 
        decisions relating to, the proposed facility, to enable 
        completion of such review and decisions within one year of the 
        request that the Secretary serve as lead agency. The Secretary 
        of Energy also shall provide an expeditious pre-application 
        mechanism for prospective applicants to confer with the 
        agencies involved to have each such agency determine and 
        communicate to the prospective applicant within 60 days of when 
        the prospective applicant submits a request for such 
        information concerning the likelihood of approval for a 
        potential facility, and key issues of concern to the agencies 
        and public.
            ``(3) Consolidated environmental review and record of 
        decision.--As lead agency head, the Secretary of Energy, in 
        consultation with the affected agencies, shall prepare a single 
        environmental review document, which shall be used as the basis 
        for all decisions on the proposed project under Federal law. 
        The document may be an environmental assessment or 
        environmental impact statement under the National Environmental 
        Policy Act of 1969 if warranted, or such other form of analysis 
        as may be warranted. The Secretary of Energy and the heads of 
        other agencies shall streamline the review and permitting of 
        transmission and distribution facilities within corridors 
        designated under section 503 of the Federal Land Policy and 
        Management Act (43 U.S.C. 1763) by fully taking into account 
        prior analyses and decisions relating to the corridors. Such 
        document shall include consideration by the relevant agencies 
        of any applicable criteria or other matters as required under 
        applicable laws.
            ``(4) Appeals.--In the event that any agency has denied a 
        Federal authorization required for a transmission or 
        distribution facility, or has failed to act by the deadline 
        established by the Secretary pursuant to this section for 
        deciding whether to issue the authorization, the applicant or 
        any State in which the facility would be located may file an 
        appeal with the Secretary, who shall, in consultation with the 
        affected agency, review the denial or take action on the 
        pending application. Based on the overall record and in 
        consultation with the affected agency, the Secretary shall 
        within 90 days issue the necessary authorization with any 
        appropriate conditions, or deny the appeal. In making a 
        decision under this paragraph, the Secretary shall comply with 
        applicable requirements of Federal law, including any 
        requirements of the Endangered Species Act, the Clean Water 
        Act, the National Forest Management Act, the National 
        Environmental Policy Act of 1969, and the Federal Land Policy 
        and Management Act.
            ``(5) Conforming regulations and memoranda of 
        understanding.--Not later than 18 months after the date of 
        enactment of this section, the Secretary of Energy shall issue 
        regulations necessary to implement this subsection. Not later 
        than 1 year after the date of enactment of this section, the 
        Secretary and the heads of Federal agencies with authority to 
        issue Federal authorizations shall enter into Memoranda of 
        Understanding to implement this section.
            ``(6) Duration and renewal.--Each Federal land use 
        authorization for an electricity transmission or distribution 
        facility shall be issued--
                    ``(A) for a duration, as determined by the 
                Secretary of Energy, commensurate with the anticipated 
                use of the facility, and
                    ``(B) with appropriate authority to manage the 
                right-of-way for reliability and environmental 
                protection.
        Upon the expiration of any such authorization (including an 
        authorization issued prior to enactment of this section), the 
        authorization shall be reviewed for renewal taking fully into 
        account reliance on such electricity infrastructure, 
        recognizing its importance for public health, safety and 
        economic welfare and as a legitimate use of Federal lands.
            ``(7) Maintaining and enhancing the transmission 
        infrastructure.--In exercising the responsibilities under this 
        section, the Secretary of Energy shall consult regularly with 
        the Federal Energy Regulatory Commission (FERC) and owners and 
        operators of electric transmission and distribution facilities.
    ``(h) Interstate Compacts.--The consent of Congress is hereby given 
for 3 or more contiguous States to enter into an interstate compact, 
subject to approval by Congress, establishing regional transmission 
siting agencies to facilitate siting of future electric energy 
transmission facilities within such States and to carry out the 
electric energy transmission siting responsibilities of such States. 
The Secretary of Energy may provide technical assistance to regional 
transmission siting agencies established under this subsection. Such 
regional transmission siting agencies shall have the authority to 
review, certify, and permit siting of transmission facilities, 
including facilities in national interest electric transmission 
corridors (other than facilities on property owned by the United 
States). The Commission shall have no authority to issue a permit for 
the construction or modification of electric transmission facilities 
within a State that is a party to a compact, unless the members of a 
compact are in disagreement and the Secretary makes, after notice and 
an opportunity for a hearing, the finding described in section 
(b)(1)(C).
    ``(i) Savings Clause.--Nothing in this section shall be construed 
to affect any requirement of the environmental laws of the United 
States, including, but not limited to, the National Environmental 
Policy Act of 1969. Subsection (h)(3) of this section shall not apply 
to any Congressionally-designated components of the National Wilderness 
Preservation System, the National Wild and Scenic Rivers System, or the 
National Park system (including National Monuments therein).
    ``(j) Ercot.--This section shall not apply within the area referred 
to in section 212(k)(2)(A).''.
    (b) Reports to Congress on Corridors and Rights of Way on Federal 
Land.--The Secretary of the Interior, the Secretary of Energy, the 
Secretary of Agriculture, and the Chairman of the Council on 
Environmental Quality shall, within 90 days of the date of enactment of 
this subsection, submit a joint report to Congress identifying each of 
the following:
            (1) All existing designated transmission and distribution 
        corridors on Federal land and the status of work related to 
        proposed transmission and distribution corridor designations 
        under Title V of the Federal Land Policy and Management Act (43 
        U.S.C. 1761 et. Seq.), the schedule for completing such work, 
        any impediments to completing the work, and steps that Congress 
        could take to expedite the process.
            (2) The number of pending applications to locate 
        transmission and distribution facilities on Federal lands, key 
        information relating to each such facility, how long each 
        application has been pending, the schedule for issuing a timely 
        decision as to each facility, and progress in incorporating 
        existing and new such rights-of-way into relevant land use and 
        resource management plans or their equivalent.
            (3) The number of existing transmission and distribution 
        rights-of-way on Federal lands that will come up for renewal 
        within the following 5, 10, and 15 year periods, and a 
        description of how the Secretaries plan to manage such 
        renewals.

SEC. 8. ELECTRIC TRANSMISSION PROPERTY TREATED AS 15-YEAR PROPERTY.

    (a) In General.--Subparagraph (E) of section 168(e)(3) of the 
Internal Revenue Code of 1986 (relating to classification of certain 
property) is amended by striking ``and'' at the end of clause (v), by 
striking the period at the end of clause (vi) and by inserting ``, 
and'', and by adding at the end the following new clause:
    ``(vii) any section 1245 property (as defined in section 
1245(a)(3)) used in the transmission at 69 or more kilovolts of 
electricity for sale the original use of which commences with the 
taxpayer after the date of the enactment of this clause.''.
    (b) Alternative System.-- The table contained in section 
168(g)(3)(B) is amended by inserting after the item relating to 
subparagraph (E)(vi) the following:


``(E)(vii).................................................        30''.

    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.
                                 <all>